Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

BRITISH WATERWAYS BILL [Lords]

Order for Third Reading read.

Queen's Consent, on behalf of the Crown, signified.

Read the Third time and passed, with amendments

CORNWALL COUNTY COUNCIL BILL [Lords] (By Order)

Order for Second Reading read.

To be read a Second time upon Thursday 10 February.

HAMPSHIRE BILL [Lords] (By Order)

Order for Second Reading read.

To be read a Second time upon Tuesday 8 February.

NOTTINGHAMSHIRE COUNTY COUNCIL BILL [Lords] (By Order)

SHREWSBURY AND ATCHAM BOROUGH COUNCIL BILL [Lords] (By Order)

BRITISH RAILWAYS BILL (By Order)

COMMONS REGISTRATION (GLAMORGAN) BILL (By Order)

GINNS AND GUTTERIDGE, LEICESTER (CREMATORIUM) BILL (By Order)

TEES AND HARTLEPOOL PORT AUTHORITY BILL (By Order)

Orders for Second Readings read.

To be read a Second time upon Thursday 10 February.

Oral Answers to Questions — HOME DEPARTMENT

Firearms Certificates

Mr. Farr: asked the Secretary of State for the Home Department if the working party on firearms control will consider the desirability of extending certificate life.

The Secretary of State for the Home Department (Mr. William Whitelaw): This subject wilt not be considered by the working party, but the fees review, about which I wrote to my hon. Friend on 28 July 1982, concluded that the life of a shotgun certificate could be doubled from three to six years provided this is coupled with a requirement to notify changes of address.

Mr. Farr: I am grateful to my right hon. Friend for that reply. When does he hope to introduce legislation to put that good news into effect?

Mr. Whitelaw: Certainly not in the immediate future.

Mr. Andrew F. Bennett: Will the Home Secretary remind the House when last we had an amnesty for illegally held firearms? Would it not be a good idea to have another one so that we can get rid of the large numbers of illegally held firearms which encourage crimes of violence?

Mr. Whitelaw: I have no plans for such an amnesty.

Telephone Tapping

Mr. Meacher: asked the Secretary of State for the Home Department what are the general issues relating to telephone tapping about which he is prepared to answer parliamentary questions, and to which he referred in his reply to the hon. Member for Keighley (Mr. Cryer), Official Report, 16 December, c. 467.

Mr. Whitelaw: I have already made it clear that the general issues on which I should be prepared to answer questions are those relating to the procedures and safeguards set out in the White Paper "The Interception of Communications in Great Britain" (Cmnd. 7873) and the role of the judicial monitor.

Mr. Meacher: There is widespread disquiet that bugging is carried out on a much wider scale than the authorities have ever permitted, particularly when it is done without ministerial warrant. On how many occasions in the past year have bugging devices been used at the discretion of the chief police officer alone? Will the Home Secretary ensure that police authorities are regularly given this information for their own areas so that at least there is some accountability over this exercise of police power?

Mr. Whitelaw: I do not accept the hon. Genileman's views on the widespread disquiet. I was asked about the interceptions that I authorised, and I have given the answer.

Mr. Stokes: Will my right hon. Friend ignore the extraordinary views of the hon. Member for Oldham, West (Mr. Meacher), which have very little support in the country, and bear in mind that most people utterly trust his judgment, particularly in matters of crime and the safety of the state?

Mr. Whitelaw: I am grateful to my hon. Friend for that assurance.

Mr. Christopher Price: How can we possibly discuss safeguards if we do not know what we are safeguarding? Surely it is reasonable for the House to be able to discuss the substantial question. Is it not absurd for hon. Members to be able to ask questions about safeguards when the Home Secretary is unwilling to tell us anything about the extent of this practice?

Mr. Whitelaw: I am simply following the practice of successive Governments in this matter, and it was debated in 1981, when the practice was fully approved.

Mr. Adley: Does my right hon. Friend receive thousands, hundreds or dozens of letters from members of the public, or occasional letters from Left-wing Labour Members?

Mr. Whitelaw: I do receive letters from hon. Members. I do not think that I receive many letters from members of the public. I shall look into the matter and give my hon. Friend the answer.

Mr. Cryer: The White Paper mentioned the number of warrants that had been issued to authorise telephone tapping. Will the Home Secretary assure the House that the number of warrants issued each year will be divulged to Parliament, possibly as a precursor to legislation, because the judge in the Malone case said that telephone tapping cries out for legislation? Will the right hon. Gentleman also assure the House that Members of Parliament are not subject to that intimidatory process?

Mr. Whitelaw: The position of Members of Parliament has been made abundantly clear by successive Prime Ministers. The hon. Gentleman said that the subject cries out for legislation. It can go on crying out, but it will not necessarily get an answer.

Mr. Cryer: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of that reply, I beg to give notice that I shall seek to raise the matter on the Adjournment as soon as possible.

Cable Television (Licences)

Mr. Wigley: asked the Secretary of State for the Home Department whether he is satisfied with the workings of section 1 of the Wireless Telegraphy Act 1949, as amended, concerning the terms and conditions on which licences are issued to cable television operators.

The Under-Secretary of State for the Home Department (Mr. David Mellor): In general the present arrangements work satisfactorily, but the control of cable operators will be reorganised under the Government's proposals for cable expansion.

Mr. Wigley: Has the Under-Secretary of State had any applications from cable operators in Wales to change from the S4C service to the general United Kingdom service? If so, will he give an assurance that the existing S4C service will be given a fair time to run before a decision is taken? Will he also give an assurance that any poll that may be taken will be conducted on a fair basis, not just in shops belonging to the company involved as the cable operator?

Mr. Mellor: I think that the hon. Gentleman is aware of the one application that has been received and that the

reasons for rejecting it were made clear in the answer given by my right hon. Friend the Home Secretary on 28 October. I have nothing to add, except that we accept the recommendation of the Committee on Welsh Affairs. We would require clear evidence of a genuine majority wishing for change before we would allow it.

Mr. Marlow: Does my hon. Friend believe that the suggestion that there should be an Asian cable television service in Greenwich will in the long run assist racial harmony and integration, which is so important in Britain?

Mr. Mellor: The Government's proposals on the wider use of cable television will be announced in due course. I shall bear in mind what my hon. Friend said.

Metropolitan Police (Recruitment)

Mr. Chapman: asked the Secretary of State for the Home Department if he is satisfied with the level of recruitment to the Metropolitan police force over the past four years.

The Minister of State, Home Office (Mr. Patrick Mayhew): Yes, Sir. During the four years ending on 31 December 1982, the strength of the Metropolitan police increased by 4,310 to 26,271—less than 350 below the authorised establishment for the force.

Mr. Chapman: I am grateful to my hon. and learned Friend for that information. Is he aware that Londoners also welcome the Home Secretary's response to the new Metropolitan Police Commissioner's preliminary report on the priorities and problems facing the Metropolitan police in allowing the force to be built up to 27,000 by the end of 1983–84?

Mr. Mayhew: The House and London will also welcome the fact that last year 1,000 police officers were put back on foot patrol duties and Sir Kenneth Newman's announcement of his intention to put another 650 on foot patrol, which is where the public want to see them.

Mr. Wellbeloved: There has been an improvement in police strength, but does the Minister agree that there needs to be a significant increase in the establishment of the Metropolitan police? Would it not be a significant contribution to the fight against crime if Left-wing extremists were to refrain from promoting street demonstrations, which consume so much police time, and if the Labour party in general were to stop its campaign aimed at undermining the police?

Mr. Mayhew: My right hon. Friend the Home Secretary has told Sir Kenneth Newman that he can expect to build up the force to 27,000 by the end of the next financial year. Large demonstrations are expensive for the police. Any campaign aimed at undermining public confidence in the police will not succeed, but such a campaign would be damaging and retrograde.

Mr. Arthur Lewis: Will the Minister suggest to the Commissioner that, although policemen retire at an early age, it might be advisable to arrange for them to stay on or to return to supernumary jobs, such as traffic control and so on, rather than to work for private security firms and so on? That would release younger policemen for the other work. Many policemen would like to take their pensions and carry on with their work.

Mr. Mayhew: I am grateful to the hon. Gentleman for his suggestion. It is a matter for the Commissioner, but I am sure that he will take heed of the hon. Gentleman's remarks.

Mr. Eggar: In view of Brent council's clear determination to undermine the Hendon training college by its insistence on the reinstatement of two lecturers who have no right to be teaching there in any case, will my hon. and learned Friend confirm that the jobs of the other lecturers, one of whom is a constituent of mine, are not threatened?

Mr. Mayhew: My right hon. Friend the Home Secretary is studying a report from the Commissioner into the episode to which my hon. Friend referred. I do not believe that there is the slightest risk to other jobs. I trust that that is the case.

Mr. Snape: Does the Minister welcome the Commissioner's proposals regarding the new consultative procedures for London? Does he agree that those proposals would not have come about without pressure from the GLC and the London boroughs? Am I being a Left-wing subversive by suggesting that the proposals merely bring a little nearer the creation of a proper police authority for the metropolitan area?

Mr. Mayhew: Naturally, my right hon. Friend welcomes the Commissioner's proposals on consultative procedures. I do not think that the hon. Gentleman or his party should take the credit for something that was given a large push by Lord Scarman in his report and is plainly common sense.

Civil Defence

Mr. Bill Walker: asked the Secretary of State for the Home Department whether Her Majesty's Government will provide 100 per cent. grant-aid to offset expenditure on emergency planning and the raising and training of civil defence volunteers by county councils and the Greater London council as required under the proposed new civil defence regulations.

Mr. Mayhew: Consultation with the local authority associations is still in progress. My right hon. Friend hopes to lay the new regulations in draft form before Parliament in March. Under the proposed regulations, civil defence grant-aid would be increased from 75 to 100 per cent. on approved local authority expenditure on the training and exercising of staff and volunteers, and on communications and related equipment in emergency wartime headquarters.

Mr. Walker: I thank my hon. and learned Friend for that reply. Is he aware that many local authorities are unwilling to take up the grant-aid because it is described by them as overspending and they claim that they are penalised for it? We must find a way to encourage all local authorities to involve themselves in this necessary activity.

Mr. Mayhew: In no case can it be a question of "cannot", although in some cases it may be used to serve as a spurious cover for political hostility to civil defence. It is a question of priorities, but all local authorities recognise, or should recognise, that they have to conform to the Government's economic strategy.

Dr. Summerskill: Will the hon. and learned Gentleman bear in mind that he may have to employ an

advertising agency to sell these regulations to the people, because not only are Labour local authorities opposing them, but Conservative authorities have now started publicly to criticise their wisdom? The Minister cannot operate an effective national civil defence scheme unless he has the positive support and co-operation of every local authority in Britain.

Mr. Mayhew: The hon. Lady would do better to add her voice to those who proclaim what is true—that civil defence is a humanitarian duty. It has nothing to do with politics. It is a humanitarian duty to protect people as far as possible in the event of a catastrophe, which we all hope will never occur.

Sir Anthony Grant: Does my hon. and learned Friend agree that local authorities would be more sensible to apply their energies and thoughts to civil defence than to the idiotic and ostrich-like activity of pretending to be nuclear-free zones?

Mr. Mayhew: I agree with my hon. Friend. I went to the conference of the so-called nuclear-free zone authorities. They sent me an invitation, but did not think that I would go. However, I enjoyed myself and told them some things that they did not expect to hear and to which they had no answer.

Mr. Eastham: The regulations refer to the movement of the population to temporary accommodation. Will the Minister say where the 500,000 citizens of Manchester, for example, will find temporary accommodation? What temporary accommodation is available in the event of a pending nuclear attack? Will there be accommodation only for those wealthy people who own pads in the Welsh mountains?

Mr. Mayhew: Every prudent local authority would wish to make such plans as are possible for almost any eventuality that can be foreseen. It is desirable that they should be encouraged to do so.

Mr. Robert Atkins: asked the Secretary of State for the Home Department if he will rename the home defence college the civil defence college; and if he will make a statement.

Mr. Mayhew: We favour a change of name and are inviting views.

Mr. Atkins: I thank my hon. and learned Friend for that helpful reply. It shows that the Home Office is paying this important subject the attention that it deserves. If it is important enough for the Swiss to establish a sophisticated civil defence system to maintain their neutrality, surely it is important for this country, which is in the forefront of NATO, to do so. Will my hon. and learned Friend continue to give civil defence the emphasis that it needs?

Mr. Mayhew: I am grateful to my hon. Friend for what he has said. As I said, civil defence is about saving people's lives, where possible. The difference between the Swiss and ourselves is that the Swiss do not contribute to preventing war by belonging to NATO. We put the bulk of our money into doing our best to prevent a war.

Sir William van Straubenzee: Will my hon. and learned Friend encourage as many hon. Members as possible from both sides of the House to visit this remarkable college, whatever its name may be in the future? They will then see the high professional standards


of the people in charge and the encouraging measures of prevention and precaution that are possible in an eventuality which we all devoutly hope will never occur.

Mr. Mayhew: I agree with my hon. Friend. It will give great encouragement to those at the civil defence college. Last year 546 people attended courses, and during this year about 700 are expected. A number of Labour supporters have attended courses. They went with a sceptical view of civil defence, but they had that view corrected.

Mr. Skinner: Has the Minister any plans to provide everyone with a shelter, such as that provided for the Prime Minister and one or two other notables?

Mr. Mayhew: I have no knowledge of any shelter for the Prime Minister, although I trust sincerely that there is a good one. The answer to the rest of the hon. Gentleman's question is no.

Mr. John Browne: asked the Secretary of State for the Home Department whether he will bring forward proposals for a community civil defence organisation which will enable the deployment of existing voluntary agencies in civil defence roles.

Mr. Bob Dunn: asked the Secretary of State for the Home Department what other agencies he considers should be included in the preparation of community emergency plans.

Mr. Mayhew: Local authorities take the lead in local emergency planning, and the Government have appointed co-ordinators for England and Wales and for Scotland to advise them on the use of voluntary effort. Valuable contributions can be made by the voluntary aid societies especially, and we encourage local authorities to seek and organise help from any quarter.

Mr. Browne: I thank my hon. and learned Friend for his reply. Is he aware that many people who are deeply interested in effective civil defence believe that voluntary effort can best and most effectively be channelled and utilised along the lines of the Devon volunteer organisation? Will he undertake to push and encourage that idea throughout the country?

Mr. Mayhew: I have the greatest admiration for the Devon voluntary organisation. Sir Leslie Mayor is responsible to my right hon. Friend the Home Secretary for assisting local authorities and voluntary organisations in England and Wales to adapt to local circumstances the best features and arrangements for civil defence that operate elsewhere.

Mr. Dunn: Is my hon. and learned Friend of the opinion that the plans can be implemented within the 24 hours recommended by his Department in circulars to local authorities?

Mr. Mayhew: My right hon. Friend is of that opinion generally.

Mr. Pavitt: Who is the chief co-ordinator—the local authority, or the local police force? What would happen at Willesden Junction, for example, where, without a war, radiation hazards from the transport of nuclear fuels could mean the evacuation of 500,000 people?

Mr. Mayhew: If the hon. Gentleman is referring to such an accident taking place in peacetime, the local authority or the police, whichever is most expedient,

would take charge. It depends on the particular circumstances. I hope that the hon. Gentleman recognises that an organisation that is set up to take precautions and make preparations during wartime will also be valuable in peacetime.

Mr. Bill Walker: What advice will my hon. and learned Friend give to local authority employees who are being advised by their local union branches not to co-operate in the event of their having to work on civil defence matters?

Mr. Mayhew: I do not believe that my advice would be particularly parliamentary. They must take every opportunity to point out that those who are seeking to impede civil defence precautions are seeking to impede the giving of help to people who may need it desperately at some time.

Mr. John Evans: When the Home Secretary publishes his Bill to force local authorities to participate in civil defence, will he include a clause that will allow local authority officers who have deeply held personal convictions not to take part?

Mr. Mayhew: I am not sure what kind of conscience would preclude a person from helping others in times of stress. My right hon. Friend the Home Secretary proposes to introduce, not a Bill, but regulations, about which we are consulting at the moment. We shall heed what we are told.

Falkland Islands

Mr. Dalyell: asked the Secretary of State for the Home Department what assessment of the impact on the Argentine he made when he decided before the Argentine invasion that British nationality would not be extended to the Falkland Islanders; and if he will make a statement on the observation of the Franks committee on this matter.

The Minister of State, Home Office (Mr. David Waddington): My right hon. Friend notes what is said in the Franks report. During the passage of the British Nationality Act 1981, which among other things created a new British dependent territories citizenship, we made it clear that nothing in the Act affected the relationship between the United Kingdom and the Falkland Islands or the Government's obligations to the islands and their inhabitants. There were therefore no grounds for the Argentines to judge that the Act represented any diminution of our commitment to the islands.

Mr. Dalyell: In that case, do Home Office Ministers believe that Lord Franks and his colleagues are being a bit hard on them? Was it a senior official of the Home Office or of the Foreign Office who scribbled over one of the warning messages received from Ambassador Williams in Buenos Aires:
Don't take too much notice of him. He is only an emotional Welshman"?

Mr. Waddington: We all know that the hon. Gentleman has read and re-read the Franks report. He knows perfectly well that paragraph 280 of that report lists several developments that may have cast doubts on British commitment to the islanders. The British Nationality Act 1981 is listed among a number of subjects, including arms sales and the airfields, and it comes last. There is no evidence that the British Nationality Act caused the junta


to doubt Great Britain's commitment to the islanders. No such evidence was revealed in any of the relevant documents submitted to Franks.

Mr. Wilkinson: How could the potential change in the lettering on the cover of the passports of a minority of the islanders, which takes effect this year, in any way affect the invasion plans of generals in the Argentine during the spring of last year?

Mr. Waddington: My hon. Friend poses a good question. The British Nationality Act made the majority of the citizens of the Falkland Islands British citizens. Furthermore, during the progress of the British Nationality Bill the Government said time and again that the establishment of the separate new citizenship of the dependent territories in no way altered the Government's obligations and commitments to the dependent territories, and the Falkland Islands in particular.

Mr. Clinton Davis: The Franks report does not really accord with the Minister's answer. What liaison, if any, was there on that issue with the Foreign and Commonwealth Office and the Prime Minister, and what was the result of that liaison?

Mr. Waddington: I shall not go into such details, but I assure the hon. Gentleman of two matters. First, there is nothing in what I have said that cuts across the conclusions of the Franks report. I have already said that in paragraph 280 Franks reported that a number of matters could have influenced the Argentine junta. We do not believe for one moment that they did. In fact, all the evidence points to the contrary.

Mr. Latham: Looking forward rather than backward, as the hon. Member for West Lothian (Mr. Dalyell) always does, will my hon. and learned Friend follow what must surely be his basic instincts and conclude that both prudence and honour require that this concession be made as quickly as possible?

Mr. Waddington: Yes, Sir. A private Member's Bill, sponsored by Baroness Vickers, has started its progress through the other place. During the progress of the British Nationality Bill through the House one plainly had to bear in mind that it was difficult to discriminate in favour of one dependent territory as against another. However, circumstances have changed. We shall look with the greatest sympathy at the Bill going through the other place.

Mr. Hattersley: Does the status of citizen of British dependent territories confer that crucial element of British protection—the availability of consular protection services in time of emergency?

Mr. Waddington: With respect, that is not the point. The right hon. Gentleman should read his hon. Friend's question. I was asked what may have influenced the junta. There is no evidence that any of the matters raised by the right hon. Gentleman or his hon. Friend had the slightest influence on the junta.

Mr. Hattersley: Does the new status of citizen of British dependent territories carry with it the crucial element of consular protection?

Mr. Waddington: I have already answered that question. During the passage of the legislation my right hon. Friend the Home Secretary made it plain that the

determination of the British Government to defend the rights of the islanders would in no way be diminished by the passage of the Bill.

Mr. Dalyell: That is a totally unsatisfactory reply. I shall seek to raise the matter on the Adjournment at the earliest opportunity.

Metropolitan police (Civilian Staff)

Mr. Eggar: asked the Secretary of State for the Home Department what limitation is placed by his Department on the number of civilian staff employed by the Metropolitan police.

Mr. Whitelaw: As police authority for the metropolis, I am responsible for determining the size of the civilian support staff employed by the Metropolitan police The current ceiling—excluding traffic wardens, cadets, part-time school crossing patrols and other staff for whom the force is reimbursed by other authorities—is 13,040 and the strength at 31 December 1982 was 12,830. The ceiling will be raised to 13,140 with effect from 1 April 1983. There will then have been increases totalling 400 posts since May 1982.

Mr. Eggar: Is my right hon. Friend aware that that is very welcome news, in that for every additional civilian member of staff employed it is often possible to redeploy a policeman? Is he further aware of the broad welcome throughout London for the proposals by the Commissioner of Police for new policing methods?

Mr. Whitelaw: I am grateful for my hon. Friend's comments on both points. It is especially encouraging that Sir Kenneth Newman has pointed out ways in which he believes it is possible to put more policemen on the beat.

Mr. Christopher Price: Will the Home Secretary encourage the civilian members of the Metropolitan police at present editing the Metropolitan police handbook to speed up the process? We were promised that a copy would be in the Library by the end of January. As January has now ended, and as we take such promises seriously and wish to read the handbook, will the right hon. Gentleman try to hurry things up?

Mr. Whitelaw: Yes, and I trust that the hon. Gentleman will be able to read the handbook very soon.

Mr. Pitt: Is the right hon. Gentleman aware that the establishment level of the Metropolitan police is pegged roughly at 1965 levels? Does he agree that it is time for a significant increase—

Mr. Speaker: Order. That relates to an earlier question. We are now dealing with the civilian staff element.

Mr. Greenway: Is my right hon. Friend aware of the additional severe strain placed on both civilian staff and police officers of the Metropolitan police by the Labour-controlled GLC police committee spending nearly £500,000 of ratepayers' money encouraging people to make unnecessary complaints against the police?

Mr. Whitelaw: I can only say that I do not know why the GLC is raising all that money from ratepayers when the GLC has no responsibility for the Metropolitan police.

Immigrants (Dependants)

Mr. Bidwell: asked the Secretary of State for the Home Department if he will take steps to compile accurate figures showing the numbers of dependants of immigrants already settled in the United Kingdom who, as dependants, would be eligible to come to settle as well; and if he will distinguish between Commonwealth citizens and European Community citizens and their dependants.

Mr. Waddington: Since January 1981 the Government have collected statistical information designed to establish the scale and pattern of future immigration from the Indian subcontinent. We have no plans to extend this exercise to other countries.

Mr. Bidwell: Does not that reply show that Tory Back Benchers who are against coloured people are having their way in Government circles? Taking the total number of dependent relatives from the old and new Commonwealth in terms of present immigration law and EC rules, which provide that families should be able to join the breadwinner in this country, does not the Home Secretary's approach show that he is pandering to the racist and Fascist wing of his party?

Mr. Waddington: I do not accept for one moment the language used by the hon. Gentleman about my hon. Friends. Nor do I accept his description of what my right hon. Friend the Home Secretary may be about to do.

Mr. Stokes: Is my hon. and learned Friend aware that the one statistic which the entire English population wish to see is that which will show that immigration into this country has entirely ceased?

Mr. Waddington: My hon. Friend must recognise that such a situation will never be reached. In any civilised society, there is inevitably coming and going. It is therefore unrealistic to talk about an end to all immigration. However, since 1979 there has been a steady and pronounced drop in the number of people achieving settlement in this country. There is no reason to believe that that decline will not continue. I appreciate full well that that is what my hon. Friends hope will happen.—[Interruption.]

Mr. Speaker: Order. The hon. and learned Gentleman must not have a private discussion with his hon. Friends. He must address the House.

Mr. Pitt: Is the hon. and learned Gentleman aware of the plight of many elderly dependent relatives in the new Commonwealth? What provision does he intend to make in the new immigration rules for them to join their sons and daughters in this country?

Mr. Waddington: The hon. Gentleman should read the rules. He will then see what is contained in the 1980 rules. He will see what was contained in the rules that were not approved by the House. I am sure that it is the wish of the vast majority of hon. Members that there should be strict controls on immigration. We cannot return to a situation in which every member of a man's family is entitled to enter this country, no matter how remote the relationship.

Mr. Jim Marshall: Does the hon. and learned Gentleman accept that the large decline in immigration shows without any doubt that there is no large pool of people seeking to enter this country for settlement? Does

he agree that that shows the futility of the argument for a register of dependants? Is it not time that members of the Select Committee who suggested such a register in the last Parliament forgot all about it and let the idea be decently buried once and for all?

Mr. Waddington: One of the reasons for the statistical exercise is to assess the size of the pool, so one cannot say that the size is already known. We have not closed our minds to the idea of a register. The difficulty is that although such a register would show the number entitled to come it would not show how many of them intended to do so, so we may find the information that we want more easily through the statistical exercise.

Mr. Proctor: Will my hon. and learned Friend confirm that there are two places in which immigrant families may be reunited—this country and the new Commonwealth countries from which they came?

Mr. Waddington: My hon. Friend knows the provisions that have been in the rules for many years. At the time of the 1971 Act undertakings were given and the statutory right to come to this country was given to the families of those settled before 1 January 1973. We cannot go back on that statutory right. After that time, undertakings were given by successive Governments that the families of those settled here would be entitled to come.

Stop and Search

Mr. Norman Atkinson: asked the Secretary of State for the Home Department whether his undertaking given to the Member for Tottenham in his letter dated 26 April 1982 that he will not allow stop and search on a random basis remains the policy of Her Majesty's Government.

Mr. Mayhew: Yes, Sir.

Mr. Atkinson: Will the Minister clear any ambiguity that may be in his mind or that of the Home Secretary as to the true meaning of the word "random"? Would not most statisticians define it as meaning that if, in any circumstances, the police selected a number of people for search from a total in excess of the number selected and the police did not know of the existence of the smaller number so selected without criteria, that would be selection of a random number and thus contrary to the undertaking given to me by the Home Secretary on 26 April?

Mr. Mayhew: I cannot confirm that, because I do not understand it. However, I do confirm that under the Police and Criminal Evidence Bill, which is passing through the House, there is provision for the police to stop and search in the street people whom they suspect of carrying stolen property or of having prohibited articles. That provision is subject to substantial safeguards recommended by the Royal Commission and has the blessing of Lord Scarman, who says that he considers it to be necessary for the combating of street crime.

Mr. Bill Walker: Is my hon. and learned Friend aware that in Scotland the power of the police to stop and search for offensive weapons has been successful and has resulted in substantial convictions?

Mr. Mayhew: I am aware of that. The figures for the first 10 months of the operation of the Scottish power show


that, of those who were stopped and searched, about one-third were found to be carrying offensive weapons or other prohibited articles. That is a good result.

Armley Prison

Mr. Joseph Dean: asked the Secretary of State for the Home Department what is the time scale for the commencement and completion of extensions and improvements at Her Majesty's prison, Armley; and if he is prepared to consider claims for financial compensation by owner-occupiers whose homes are affected by the proposals.

Mr. Mellor: Subject to the early completion of the purchase of the additional land, including houses adjacent to the proposed new wall, it is hoped to start construction of the main extension in 1985–86. Design work is already being done. The need to decant means that the full programme of improvements will necessarily take some time. We are not aware of any grounds for paying compensation to other owner-occupiers in the area.

Mr. Dean: I thank the Minister for the information. Is he aware that when the proposals are carried out, and the plans completed, the new wall of the prison will be within feet of existing owner-occupied houses, with the result that their valuations will be seriously affected? Will he at least consider whether the Department has some responsibility for the devaluation that my constituents will suffer?

Mr. Mellor: I understand the hon. Gentleman's point. We wish to keep disruption to his constituents to a minimum. To assist in this process we have agreed to purchase, at the request of the city council, 13 houses immediately adjacent to the wall. We do not believe that any substantial disruption of amenity will take place for any other occupiers, but we shall listen with sympathy to what the hon. Gentleman says.

CS Gas Cartridges (Liverpool Incident)

Mr. Parry: asked the Secretary of State for the Home Department what further representations he has received calling for an inquiry into the use of CS gas cartridges in Liverpool in July 1981.

Mr. Whitelaw: On 16 December I answered a question from the hon. Member for West Stirlingshire (Mr. Canavan) about representations to me about CS and baton rounds, which included those that I had received asking for such an inquiry. I have received no further representations on this matter since then.

Mr. Parry: The Home Secretary is already aware of the grave disquiet on Merseyside among the general public and the community organisation. Will he give an assurance that he will call for a public inquiry after the civil actions against the police have been concluded?

Mr. Whitelaw: I am glad that the hon. Gentleman agrees that we must not prejudice the civil proceedings. I cannot give that assurance, because the situation will depend upon what happens in the proceedings.

Cruelty to Animals Act 1876

Mr. David Atkinson: asked the Secretary of State for the Home Department when he proposes to seek to amend the Cruelty to Animals Act 1876.

Mr. Mellor: We hope to have proposals ready in the spring and to introduce legislation as soon as possible.

Mr. Atkinson: I thank my hon. Friend for his encouraging reply. Can he assure the House that the absence of a Council of Europe convention will not delay the introduction of any legislation before the next election, as this is one of the few remaining manifesto commitments by the Government yet to be implemented?

Mr. Mellor: The convention is at an advanced stage, and we shall make proposals shortly. However, implementation rests on matters that are not within my control.

Dr. M. S. Miller: When considering legislation on this subject, will the hon. Gentleman ensure that it will still be possible for medicines to be examined and tested properly so that benefits for all people are not adversely affected?

Mr. Mellor: I endorse what the hon. Gentleman said. This is a two-sided argument and there is great difficulty in knowing precisely where to draw the line. The difficulties are increased when only one side of the argument seems to be widely and publicly stated.

Mr. John H. Osborn: Has my hon. Friend received a report of a public hearing in December at the Council of Europe? Does he agree that the provisions of the convention are considerably milder than the 1876 Act and what might be acceptable here?

Mr. Mellor: There is concern over clause 9 of the draft convention, but I assure my hon. Friend that pursuant to clause 4 of the convention, if it be our will to apply stronger provisions in Britain than would be necessary by the convention, we have the right under the convention to do so.

Police Community Committees

Mr. Leighton: asked the Secretary of State for the Home Department whether he is satisfied with the progress in setting up the police community committees in the Metropolitan police area as recommended by the Scarman report.

Mr. Whitelaw: Consultative groups, reflecting the guidelines that I issued in June, are now operating in eight boroughs or districts in the Metropolitan police district. Agreement in principle to set up similar groups has been reached in a further 12 and discussions are continuing in other areas. Given that wide-ranging discussions within the local community are a necessary preliminary to the formation of a group, I am satisfied with the progress that has been made.

Mr. Leighton: Does the Home Secretary accept that effective policing is dependent upon the consent, confidence and even participation of those being policed and that these committees can play an effective role in helping to bring that about? Will the right hon. Gentleman use his best endeavours to expedite this development, suggested by Lord Scarman?

Mr. Whitelaw: I have done that ever since the Scarman report was published. I am grateful to all hon. Members on both sides of the House who are taking part in the consultative groups in London and who are playing an important part in them. I hope that some of the councils


that are considering excluding Members of Parliament from some of these groups will realise the importance of having Members of Parliament in them.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Nelson: asked the Prime Minister whether she will list her official engagements for Thursday 3 February.

The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Mr. Nelson: Will my right hon. Friend find time in her busy day to reassure the many people who are deeply alarmed at the assumption in the Government's expenditure White Paper published this week that the prices of nationalised industries, including heating, electricity, transport and postage, will rise in the year ahead by the rate of inflation? As these prices have consistently risen by more than the rate of inflation for several years, does my right hon. Friend agree that both the Government and consumers are entitled to expect more restraint in the future?

The Prime Minister: What my hon. Friend says is true. The monopoly nationalised industries do not have the same spur of competition as the private sector. There will be an improvement only if strenuous efforts are made to cut costs and increase efficiency. In the meantime, we welcome the decision of the British Gas Corporation to freeze industrial prices and of the electricity industry not to increase average prices for the coming year.

Mr. Foot: Will the right hon. Lady give us a list of the nationalised industry price increases that she forced up by orders from on high? Furthermore, in view of the appalling figures published today, as the right hon. Lady has suggested that the only cure for mass unemployment that she believes in is a fall in the inflation rate, will she tell us when she thinks her cure will start to work? Is it not a fact that her Government are contemplating an increase of 280,000 or more on the already hideous and terrible unemployment figures published today?

The Prime Minister: The unemployment figures are a great disappointment. However, as the right hon. Gentleman will know, unemployment is rising the world over and in some countries, for example, Germany, the United States, Canada and Holland, it is rising faster than in the United Kingdom. Rhetoric, rows and strikes will not improve the position. It is only by having sound financial policies—which we have—by trying to keep interest rates down, by having industrial incentives and by drumming up orders the world over, delivered on time and at a price and design that people want, that we shall improve the underlying employment position.

Mr. Foot: If the right hon. Lady talks about drumming up orders all over the world, why has the Central Electricity Generating Board placed a £10 million order for a cable-laying ship with a Korean shipyard at a time when British Shipbuilders is perfectly prepared to do the job? What representations has the right hon. Lady made to put

that right? When she talks about the general situation, does she recall that she said that 1981 would be the year when results begin to show? What has gone wrong since then?

The Prime Minister: What has gone wrong since then, as the right hon. Gentleman would know if he looked around him, is that there has been a very deep world recession—[HON. MEMBERS: "Oh."]—which was much deeper than expected, and that hit other industrial countries as well as our own—a recession that is the deeper because of the enormous loans that were made to the under-developed countries, greatly in excess of what some of them could afford to repay in either interest or capital.
On the subject of the vessel, there is an intervention fund for British Shipbuilders. Where the ship required is the one which the purchaser wishes to buy and can be quoted at a competitive price, the order goes to British Shipbuilders. Where it is not, the order goes to the shipyard most suitable for the task.

Mr. Foot: If the right hon. Lady is not prepared to intervene at once to get the order for British shipyards, will she cease to go around the country talking about buying British? [HON. MEMBERS: "Hear, hear."]

The Prime Minister: No, because, unlike the right hon. Gentleman, I am prepared to advise people to buy British only when British goods are the best, most competitive and most suitable to the buyer. The alternative course of protecting and cosseting British industry would lead to untold increases in the cost of living, untold inefficiencies in British industry, and a reduction in our standard of living.

President Reagan (Economic Summit)

Mr. Latham: asked the Prime Minister what items she intends to discuss with President Reagan in May at the economic summit.

The Prime Minister: Discussion is likely to concentrate on the state of the world economy, the prospects for lasting recovery, the risks of protectionism, and the problems of debtor countries, but it is too soon to say definitely what the agenda will be. I certainly expect to have bilateral talks with President Reagan at the same time.

Mr. Latham: When my right hon. Friend meets the President, will she stress that America cannot get on the mend by transferring its economic problems to the rest of the Western nations, and that if we are to avoid destabilising changes in the exchange rate and interest rates America will have to do something about its budget deficit?

The Prime Minister: I believe that the United States Administration recognise the problems that a large deficit creates, not only for their own economy, but for economies in the other parts of the world—our economy and European economies. I believe that in the recent budget they have made provision to reduce those deficits, and it is important for all of us that they succeed in that objective.

Mr. David Steel: While it is obviously right that the world economic problems should be dealt with at this summit, will the Prime Minister confirm that today's unemployment figures mean that unemployment in this country has risen during her period of office twice as fast


as in the other countries of the European Community? Will she therefore accept at least half the responsibility for the figures?

The Prime Minister: I understand that the right hon. Gentleman is asking about the speed at which unemployment has risen. It has risen faster in this country than in some others, and in other cases it has risen faster in other countries. Let me give the figures. These are the actual figures published in each country—the crude figures. In the United Kingdom, from May 1979 to December 1982 there was an increase in unemployment of 135 per cent.; in Germany, from May 1979 to December 1982 there was an increase in unemployment of 140 per cent. and in the Netherlands, from May 1979 to November 1982 there was an increase in unemployment of 186 per cent.

Sir Hugh Fraser: May I ask my right hon. Friend whether full preparation has been made for this summit, which will be of vital interest to the Western world because of the worldwide depression? Will she give us an assurance that sufficient work has been done on the control, not just of interest rates, but of the rates of exchange, and on reorganising the immense debt that is now weighing down our production chances and opportunities?

The Prime Minister: All those matters are the subject of studies that are going on now, before the summit in May.

Mr. Arthur Lewis: While the Prime Minister is discussing economic matters with President Reagan, will she point out to him that although it might be good for the American economy to supply aggressive Lockheed Hercules bomber aeroplanes to Argentina, it is in fact breaking an agreement that America has with us not to supply warlike materials to Argentina? Will she ask the United States to stop supplying aggressive war materials to any Fascist country?

The Prime Minister: I know that certain matters about supplying armaments from the United States to Argentina are under consideration. We made strenuous representations that such armaments should not be supplied, and I believe that at the moment only spares are being supplied. However, I shall check on that, following the hon. Gentleman's question.

Engagements

Mr. Trippier: asked the Prime Minister if she will list her official engagements for 3 February.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Trippier: Does my right hon. Friend agree that it is now becoming clear that the major difference between the unilateralists and the multilateralists is that the unilateralists want peace at any price, whereas the remainder of us would view the sacrifice of freedom as too high a price to pay?

The Prime Minister: I entirely agree with my hon. Friend. Unilateral disarmament would put peace at risk

and it would put peace with freedom and justice at risk. We in this country do not want peace at any price. We want peace to retain freedom and justice, which is a part of our way of life. That peace has been kept by the possession of nuclear weapons. If there is to be disarmament, as most of us desire, it must be all-sided disarmament, not just one-sided disarmament.

Mr. Christopher Price: The Prime Minister referred recently to the spur of competition. What spur of competition existed when her right hon. Friend the Secretary of State for Transport handed out to Travers Morgan and Peat, Marwick, Mitchell, without going out to tender in any way, over £600,000 of public money as an interim payment?

The Prime Minister: The hiring of those consultants was fully in accordance with published codes of practice and precedents.

Mr. Waller: Will my right hon. Friend remind the women camping out at Greenham Common that the only country that has suffered a nuclear attack in war was one without a deterrent and the means of delivering it? Is it not an ironic but tragic fact that the only effect of demonstrations of this nature is to put off genuine multilateral disarmament because the Soviets may doubt our determination to defend ourselves?

The Prime Minister: My hon. Friend is correct. The purpose of nuclear weapons is to deter any form of war across the NATO border. It has succeeded in that very well, because the risks of going to war for either side would be too great. I believe that what is happening now is that the Soviet Union, having no public opinion and denying its people any public opinion, is relying on some elements of our public opinion to enable it to keep all its SS20s, while denying us the necessary deterrent to prevent the Soviet Union from using them.

Mr. Cryer: asked the Prime Minister if she will list her official engagements for 3 February.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Cryer: Does the right hon. Lady accept that the women at Greenham Common, along with the vast majority of the population, are concerned that the installation of cruise missiles under American control will represent an escalation of nuclear weaponry which is not subject to any form of verification throughout the whole of Europe? Is not the £1 million campaign on which the Prime Minister and her cronies are about to embark a public relations exercise to hide the fact that she is a warmonger, in a year that is likely to be an election year?

The Prime Minister: The hon. Gentleman is talking his usual rubbish. The cruise and Pershing missiles are a modernisation of existing nuclear forces, a modernisation that has already taken place in the Soviet Union. When the missiles come here, their use and the use of the bases will be a matter of joint decision. It would be far better if the hon. Gentleman addressed his remarks to the Soviet Union to try to get it to take down its missiles.

Business of the House

Mr. Michael Foot: Will the Leader of the House state the business for next week?

The Lord President of the Council and Leader of the House of Commons (Mr. John Biffen): Yes, Sir. The business for next week will be as follows:
MONDAY 7 FEBRUARY—Proceedings on Consolidated Fund Bill.
TUESDAY 8 FEBRUARY—Second Reading of the Mobile Homes Bill [Lords] and of the Nuclear Material (Offences) Bill.
Motions on the draft Milk (Northern Ireland) Order and on the draft Quarries (Northern Ireland) Order which are consolidation measures.
WEDNESDAY 9 FEBRUARY—Opposition day (7th Allotted Day). Until about 7 o'clock a debate on the East Midlands followed by a debate on the Northern region. Both debates will arise on Opposition motions.
Motion on the draft Education (Assisted Places) (Amendment) Regulations 1983.
THURSDAY I0 FEBRUARY—Debate on Welsh affairs on a motion for the Adjournment of the House.
FRIDAY II FEBRUARY—Private Members' Bills.
MONDAY 14 FEBRUARY—Private Members' motions until 7 o'clock.
The Chairman of Ways and Means is expected to announce opposed private business for consideration at 7 o'clock.

Mr. Foot: I must put a number of matters to the right hon. Gentleman. In the light of our exchanges a few moments ago about the £10 million order being placed in a Korean shipyard, the Opposition want to have a chance of saving that order for British shipyards. May we have a statement from the Government either tomorrow or on Monday on that subject?
Two other matters are left over from exchanges earlier in the week. Will the Government make a statement on the money and arms that are being supplied from this country in one form or another to Argentina? That matter has been left in greater confusion following the statements that have been made by the Government. That applies also to the extremely important question to which the Prime Minister referred a few moments ago—the so-called dual control over the proposed cruise missiles to be stationed in this country. We in the Opposition and, I believe, many people in the country believe that the statements by the Secretary of State for Defence and the Prime Minister on that subject have only added to the confusion. The Prime Minister or the Secretary of State should make a statement so that what they have said might at least be clarified.
The public expenditure White Paper was published this week, and I presume that the Government will provide an early day for discussion of it.
Finally, I must renew to the right hon. Gentleman the request that I have made on a number of occasions. I am sure that he will be eager to comply with it very soon. We want a full debate on disarmament and the disarmament talks. The Opposition have been pressing for it for a long time, and we hope that the Goverment will now concede it.

Mr. Biffen: I shall respond to the Leader of the Opposition's questions in the order in which he asked them.
The right hon. Gentleman referred to the possibility of ships being ordered from Korea. I shall convey his anxiety that there should be a statement. I know that he will appreciate that there is to be a debate on British shipbuilding on the Consolidated Fund Bill, but I realise that he is concerned that my right hon. Friend the Secretary of State for Industry should consider the possibility of making a statement.
The right hon. Gentleman requested a statement on relations with Argentina in respect of defence and credit. Of course, as the request was made by the right hon. Gentleman, that requires me to regard it with the utmost courtesy and seriousness. I shall refer it to my right hon. Friend, but I think that it is fair to say that the Government have already made clear their policy on those important matters by means of answers to private notice, oral and written questions. Both subjects were explored again in detail during Treasury questions last Thursday and defence questions on Tuesday this week. However, I take note of the Leader of the Opposition's request.
With regard to a debate on cruise missiles, I am sure that the Leader of the Opposition will have noted that a three-hour debate on that topic will arise on the motion tabled by the right hon. Member for Stockton (Mr. Rodgers). That may cover the points that the Leader of the Opposition has in mind. Let us see what happens in the debate.
I take note of the right hon. Gentleman's request for discussion on the public expenditure White Paper. I am sure that the normal procedures will be followed. There was last week a request for a debate on disarmament. I cannot go beyond the answer that I gave then.

Several Hon. Members: rose—

Mr. Speaker: Order. I should tell the House that there is widespread interest in the main debate today. I already know that many hon. Members who hope to catch my eye will not be able to do so. Therefore, I hope that the time that we usually spend on business questions will be reduced.

Mr. Nicholas Fairbairn: I trust that this matter is of such importance as not to waste the time of the House. Will the Leader of the House arrange with the utmost urgency a debate on the expulsion from Nigeria of 2 million Africans? This is a matter of human dignity and suffering on a scale that few of us have understood. I have the privilege of having a letter dated 2 February from the Leader of the Opposition to the Nigerian ambassador. It seems to be a matter in which he would have been previously interested and one on which the whole House should express its view immediately.

Mr. Biffen: I appreciate the solemnity of the issue, but I cannot hold out any offer of Government time for a debate on it next week.

Mr. Tam Dalyell: May I ask the Leader of the House a question of which I have given notice to his office and also to the right hon. Member for Plymouth, Devonport (Dr. Owen) about the instructions given to the Navy in 1977? Has the Leader of the House noted that Lord Lewin yesterday reiterated that the right


hon. Member for Devonport was wrong and his memory was mistaken? Is not that of some consequence with regard to the right hon. Gentleman misleading the House? Could time be found for a statement to be made?

Mr. Biffen: I appreciate the hon. Gentleman's courtesy in informing my office that he intended to raise that point. However, personal statements by Members are not a matter for me.

Mr. John Roper: As the Mobile Homes Bill is receiving its Third Reading in the other place at the moment, will the Leader of the House be able to tell us when it will be available to us and whether there is any special reason why he has brought forward the Second Reading to Tuesday next week?

Mr. Biffen: The Bill will be available tomorrow morning. It is a valuable social measure. One felt that it deserved priority in the timetable.

Mr. Albert McQuarrie: Will my right hon. Friend find time for a debate on the economy of the dependent territory of Gibraltar in view of the fact that there is a great deal of apprehension about the commercialisation of the dockyard? If it is closed, it could lead to a complete catastrophe for that dependent territory.

Mr. Biffen: I appreciate the importance of that point, but there is no likelihood of it being debated in Government time next week or, indeed, in the near future.

Dr. John Cunningham: Is the Leader of the House aware of the crisis that is facing British shipbuilders, which has been highlighted by the announcement a few days ago that more than 2,000 shipbuilding workers on Tyneside and Wearside are to lose their jobs? Does he recognise how grotesquely insulting it is to these workers to learn that taxpayers' money granted to a public corporation is being used to place an order in a Korean shipyard? Will he arrange for the Secretary of State for Industry and the Secretary of State for Energy to explain to the House why this appalling state of affairs is allowed to exist?

Mr. Biffen: I am sure that the hon. Gentleman appreciates that he will have a chance to raise these arguments both in the debate upon shipbuilding which has been secured by the hon. Member for Jarrow (Mr. Dixon) on the Floor of the House on Monday and also next Wednesday in the debate on the Northern region. I cannot add to the reply that I gave earlier to the Leader of the Opposition.

Mr. John Wilkinson: May I ask my right hon. Friend when we may expect a statement on the outcome of the conference which Mr. Speaker so rightly initiated on the form of Prime Minister's Question Time? The sooner the matter is cleared up and we get back to a more structured, disciplined system of Prime Minister's Questions, doing away with the abuse of the open question, the better.

Mr. Biffen: I must say to my hon. Friend that his question would be better directed to you, Mr. Speaker, than to me.

Mr. Speaker: Yes; and I shall be making a statement when we finish business questions.

Mr. Thomas Cox: When does the Leader of the House expect to be in a position to make a statement

on Government policy regarding possible changes in the fees that are charged for overseas students, especially those from the Commonwealth?

Mr. Biffen: Certainly there are no plans for such a statement in the business that I have announced for next week, but I shall draw the point to the attention of the relevant Minister.

Mr. John Lee: Has my right hon. Friend considered giving time to a debate or discussions on the ludicrously embarrassing workings of the Standing Committees of the House?

Mr. Biffen: No. Clearly it is a matter which is always within the competence of the House, being a question of changing the procedure of the House. I take note of what my hon. Friend says. As we move towards the end of a Parliament, it is unlikely that there will be any desire to embark upon major procedural reform.

Mr. Frederick Willey: Is the Leader of the House aware that the loss of the shipyard order is a loss to a yard in my constituency? I raised this with the Minister of State yesterday and he undertook to make a statement in the Standing Committee this morning, but he was not afforded the opportunity to do so. Is the Leader of the House aware that this matter is causing real anxiety in Sunderland and that we expect an immediate reply?

Mr. Biffen: I appreciate the right hon. Gentleman's point. I intimated when answering the first question of the Leader of the Opposition that I would refer the matter to my right hon. Friend. When I do that, I shall draw his attention also to the points made by the hon. Member for Whitehaven (Dr. Cunningham) and by the right hon. Gentleman.

Mrs. Shirley Williams: The Leader of the House will be aware that a substantial pay claim has been submitted for the workers in the electricity supply industry. Will he consider finding time for a debate on the handling of industrial disputes in essential services since the public's experience of the water dispute would lead them to be profoundly concerned about the possibility of a power dispute along the same lines?

Mr. Biffen: I note the point that the right hon. Lady makes. There are no plans for a statement next week, but I should have thought that these were matters that were always before the House.

Mr. John Maxton: In view of the figures that show that Scottish Members are disadvantaged in terms of oral questions to the Secretary of State for Scotland and his ministerial colleagues, will the Leader of the House consider trying to find more time for Scottish questions, with at least one more Scottish question time in the cycle of four weeks?

Mr. Biffen: The present allocation of Question Time is the consequence of the most imaginative and delicate consideration. To disturb it would cause much more resentment than placation.

Mr. Tom Clarke: In view of the fact that the second Brandt report is to be published next week, when may we expect the Government's response? Will the Leader of the House make arrangements for an urgent debate on the report?

Mr. Biffen: I can offer no prospect of a debate next week, but I shall certainly draw the attention of my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs to the point that the hon. Gentleman has made.

Mr. D. N. Campbell-Savours: Has the Leader of the House seen the Prime Minister's reply to me on the International Monetary Fund loan that was made to Argentina? Has he noted that the reply did not preclude conditionality in the allocation of the loan? Will he ensure that the Chancellor of the Exchequer comes to the House to assure hon. Members that, if the IMF is to make loans with our funds to the Argentines, the question of conditionality is introduced during the negotiations?

Mr. Biffen: I shall draw to the attention of the Chancellor of the Exchequer the point that is exercising the hon. Gentleman.

Mr. Bob Cryer: Will the Leader of the House make a statement on the £1 million public relations campaign against the peace movement which is apparently being considered, particularly in the light of the claims in the New Statesman of 8 January that there are secret meetings taking place with the Minister of State for Defence Procurement and Foreign and Commonwealth Office officials to plan a campaign? With £1 million sloshing around, it is important that we know precisely where the money is going and that it is not being filtered off through some anti-peace subversive organisation.

Mr. Biffen: The hon. Gentleman will recall that at Question Time on Monday it was established that no decision had yet been taken on this matter.

Mr. Dennis Skinner: Is the Leader of the House aware that on two successive Thursdays the Leader of the Opposition and Back Benchers on both sides of the House have asked for a statement by the Prime Minister to explain in detail why the British Government have taken part in an IMF loan, a medium term loan and a bridging loan with the assistance of British banks, whose representatives the Prime Minister met yesterday? Is it not a scandal that the Prime Minister has refused to come to the Dispatch Box and explain why Britain is handing over large sums of money to Argentina so that it can carry on

with a rearmament programme and, according to today's press, take over some of the Falkland Islands at the same time? It is high time this hypocrisy ended and the Prime Minister made a statement to answer the British nation.

Mr. Biffen: I do not think I can helpfully add to what I said to the Leader of the Opposition.

Mr. Skinner: Dodging.

Mr. John Silkin: I am sure that the Leader of the House would not wish to use the new procedure on the Consolidated Fund Bill as an alibi to save his right hon. Friends. Will he think again strongly about the request of my right hon. Friend the Leader of the Opposition and my hon. Friend the Member for Whitehaven (Dr. Cunningham)? If he studies last Tuesday's questions, he will find that the questions on the supply of armaments to Argentina and on the dual key on cruise missiles were not answered. They ought to be answered by a statement in the House. I asked for that a week ago, as the right hon. Gentleman knows. My hon. Friend the Member for Whitehaven is right in his request for a statement to be made by the Secretary of State for Industry. Will the Leader of the House therefore reconsider that, but not in the light of the new Consolidated Fund Bill procedure?

Mr. Biffen: Yes, of course. I thought that the tone I used in answering the right hon. Member for Sunderland, North (Mr. Willey) showed that, when I pass this information to my right hon. Friend, it will not be merely a passive situation.
I do not believe that the House would wish me to establish any tradition whereby the Consolidated Fund Bill proceeded without Government replies being given that carried some authority. The fact that they are given on Adjournment debates arising from the Consolidated Fund should not disparage them. The right hon. Member for Deptford (Mr. Silkin) does not want the Government to hide behind the skirts of debates on the Consolidated Fund, but they are important debates and statements made in them by Ministers on the Floor of the House have an authority that must be recognised. I shall respond to the general points made by the right hon. Gentleman about the request for a statement in the same sense as I have responded to the Leader of the Opposition.

Prime Minister's Question Time

Mr. Speaker: I undertook yesterday to inform the House of the outcome of the informal all-party talks that took place last evening in my house on the subject of Prime Minister's Question Time. I should like to say at once how grateful I am to the Leader of the House, to the shadow Leader of the House and to the representatives of the parties in the House who came together at such short notice. I also want to thank those hon. Members who sent in written representations to me. Every suggestion received was carefully examined. I am also deeply grateful for the fact that our discussions remained confidential.
Our conversation concentrated on two principal matters—that of unreasonable noise, and the open question. No experienced parliamentarian expects or wishes our proceedings to be conducted in total silence, nor do we expect it. Our adversarial tradition, due to the clash of party opinion in the House, encourages the expression of support and dissent. We are all well accustomed to this. What is insufferable, and what was universally condemned in our all-party discussions last night, is the attempt to deny any hon. Member a fair hearing. That is the type of noise that I hope we can eliminate. I look for the support of the House as a whole in the elimination of this threat to our traditional way of proceeding.
On the issue of the open question, I have made no secret of my preference for the substantive question that enables the House to know the issues that are to be raised and allows considered answers to be given. However, it is clear that there are arguments in favour of open questions in that they enable topical matters to be raised and a greater range of issues to be covered, however briefly, in the time available for Prime Minister's questions. Last night we considered a variety of methods of at least improving the chances of hon. Members who wish to put substantive questions to the Prime Minister having their questions reached. We concluded that every remedy we considered would require a change in the rules of the House and that this was not an appropriate time in the life of this Parliament to embark upon such changes.
I am certain from the response I received from the House as a whole, from both sides, when I proposed the all-party meeting that there is great unease about the dominance of the open question at Prime Minister's Question Time. Despite our combined efforts and long consideration, our only conclusion is that the solution really lies in the hands of hon. Members themselves. If hon. Members put down more substantive questions, the better will be the chance of some of them being reached, as one was today.

Mr. Bob Cryer: On a point of order, Mr. Speaker. As you have been kind enough to raise this question and to give a report to the House, for which hon. Members are grateful, I wonder whether you can say whether any conclusions were reached on a specific point which was raised with you and which received, I thought, widespread support. I refer to the proposal that privileges given to Privy Councillors should be ended and that all hon. Members should be placed on the same basis, both at Question Time and in debate.
The question was also raised of giving preference at Prime Minister's Question Time to those who have taken

the trouble to put down questions, thus enabling perhaps 12 or 20 hon. Members to ask questions, rather than hon. Members being picked at random from among those present.

Mr. Speaker: There are certain difficulties in what appears to be a reasonable suggestion by the hon. Gentleman. It would mean leaving out the leader of his own party from those asking questions if I simply go down a list, calling on everyone whose name is on the Order Paper to ask a supplementary question. That would fill up the whole quarter of an hour.
We examined these questions with care. I did not consider that the issue of Privy Councillors was a matter for discussion last night. It is a matter for a Select Committee of the House. I guard the conventions of the House as best I can. Two Privy Councillors tried several times this afternoon to catch my eye, but they were unlucky. They did not succeed.

Mr. John Wilkinson: Further to that point of order, Mr. Speaker. Do you agree that the House is more likely to be orderly and the noise level reasonable if there are more substantive questions? Instead of the encouragement given to abusive exchanges that arise from the open question, when hon. Members feel aroused to raise any subject under the sun, a substantive question would at least mean that they had to address their minds to staying in order. This is a discipline that has in the past enhanced the quality of Prime Minister's Question Time.

Mr. Leslie Spriggs: As several Prime Ministers have had to face a barrage of open-ended questions for many years, why should the issue of the open-ended question have arisen at this time?

Mr. John Maxton: Scottish Question Time is perhaps unique in that five of the eight minority party Members who wish to raise questions happen to be Privy Councillors. That gives an unfair advantage to Privy Councillors at Scottish Question Time.

Mr. James Lamond: Before the idea gets too widespread that there is a unanimous feeling in the House against open questions, may I point out that hon. Members have the opportunity to put down specific questions, yet 57 of the 63 questions on the Order Paper today for answer by the Prime Minister are open questions. This method must therefore meet the desires of the hon. Members who have tabled those questions.

Mr. Norman St. John-Stevas: Did not the dominance of the open question arise from the habit of some Prime Ministers of transferring substantive questions to departmental Ministers? Is it not true that, since the Select Committee report of 1977, that situation has been remedied? Therefore, would it not be reasonable to have a trial period in which substantive questions were given priority over open questions?

Mr. Geoffrey Dickens: I know, Mr. Speaker, from my conversations that many Back-Bench Conservative Members are delighted with your ruling, because all of us are confident about our Prime Minister answering questions without putting a foot wrong whatever method is used. It is common knowledge within the House and within the country that, however difficult the questions, we have a Prime Minister who will always beat the Opposition into the ground.

Mr. Speaker: Order. So long as I sit here, some hon. Members will wish to put a point of view under the guise of a point of order. I have given my ruling to the House. The truth is that we are better at diagnosis than we are at cure.

Water Industry (Dispute)

4 pm

The Secretary of State for the Environment (Mr. Tom King): With permission, Mr. Speaker, I would like to make a further statement to the House about the water industry dispute.
Since my statement on Tuesday, there has been a further increase in the number of people advised to boil water as a precaution. The figure is now 6·75 million. Approximately 23,000 properties are now without any water supply, but arrangements have been made, or are being made, for alternative supplies. There has been some further reconnection of properties to the mains supply. The quality of effluent from more sewage treatment works has deteriorated, but there has been no serious effect on rivers and no significant pollution incidents have been reported.
In my statement on Tuesday I informed the House that there had been further discussions between ACAS and the employers and that ACAS was to see the unions in the evening. Following those talks the employers confirmed that they were ready and willing to have immediate negotiations about higher earnings in relation to improved productivity under the terms recommended by the mediator in paragraph 8 of his report. I understand that the unions have not accepted this proposal and that industrial action is, therefore, continuing.
I believe that there is no longer any justification for the continuation of this industrial action which is causing such inconvenience and distress to those affected by it. The offer to the water workers of an increase on average of £10 per week, together with the prospect of a significant increase in earnings in return for productivity, is by any standards this year a very fair offer indeed.
There should be an immediate end to industrial action and the unions should decide which of the two options that I outlined to the House on Tuesday they will pursue. They can either accept the employers' offer to negotiate as a matter of urgency on the issue of higher earnings for productivity as recommended by the mediator, or, if they are unable to accept that, the agreement reached through ACAS must be honoured and the terms of the national agreement requiring arbitration followed. Either way, it is possible for the industry to resume its full responsibilities and services to the public at the earliest possible moment. That is now what must be done.

Mr. Gerald Kaufman: Is the Secretary of State aware that the Opposition place the greatest importance on an urgent resumption of negotiations that could lead to a speedy and honourable conclusion of this serious dispute? It is hoped that the Secretary of State will adopt the new tone that has been evident today in some of the statements coming from the employers. We welcome the emphasis given by the employers to paragraph 8 of the mediator's report that has been taken up by the Secretary of State.
As the House knows, the Opposition have, from the first day of the dispute, emphasised and drawn attention to the central importance of paragraph 8. Throughout this period my right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell) and I have been in close and regular touch with both sides in the dispute. Although the Secretary of State has referred to a new offer in his statement, and Mr. Len Hill said in a radio interview today


that the offer would be worth a minimum of a further £5 to £10 a week, no offer has been made to the unions today or at any time this week. As a result of our discussions during the past hour, I can say that as soon as the employers make this offer direct to the unions rather than on the radio the unions will stand ready to negotiate immediately upon it.
The Opposition do not believe that any further exchanges across the Floor of the House today can assist. Will the Secretary of State encourage all parties concerned to get together without delay to negotiate? It is the duty of the House to ensure that this dispute is settled quickly and honourably, so that the growing dangers of pollution can be avoided and so that householders and industry may have the reliable and safe water supplies that the law entitles them to expect.

Mr. King: I much prefer the right hon. Gentleman's approach today to that which he adopted on Tuesday. He asked whether this is a new offer and welcomed the new tone of my statement. He will be aware, as he has a copy of my statement, that my previous statement said exactly the same thing about the new offer. What I said to the House on Tuesday remains the position. The employers have said that they are happy to accept urgent negotiation under paragraph 8 of the mediator's report. It is for the unions to decide which way they want to go. I apologise for the length of this answer, Mr. Speaker, but it relates to a very important point.
I heard the comments of Mr. Len Hill on "The World at One". I do not recall him using the word "minimum", but I have not seen a transcript. Undoubtedly significant increases in earnings are available if agreement can be reached on the number of productivity proposals that the employers are ready and willing to discuss. That was made clear on Tuesday, and I make it clear from this Dispatch Box today.
I hope that the right hon. Gentleman will say that, if that is the way to go, he accepts the mediator's report and the need for negotiations under paragraph 8. On that basis there can be no justification for further industrial action. There is no need for further loss of earnings by the workers involved. There should be a resumption of work immediately and the negotiations can then proceed.

Mr. Kaufman: I hope that the Secretary of State and I will avoid any temptation to negotiate across the Floor of the House today. The potentialities for a settlement will not be assisted by extemporary exchanges in the House. I strongly suggest that what is required is that the Secretary of State, with his responsibilities as I with mine, should urge both sides to get round the negotiating table immediately so that the potentialities of paragraph 8 may be explored and this strike can be concluded as quickly as possible in an honourable way.

Mr. King: I give the assurance that at no time would I ever seek to negotiate with the right hon. Gentleman across the Floor of the House. I understand why he said that, but I hope that he will join me in calling for a return to work. If he does not feel able to do so, I shall not press the matter now. It is something that the country hopes to hear. As I said on Tuesday, the employers are ready and willing to enter into negotiations.

Several Hon. Members: rose—

Mr. Speaker: I propose to call two questions from either side and then to move on. I think that that will be enough, in view of the statements made.

Mr. Charles Morrison: Is my right hon. Friend aware that many water workers believe that the present offer is adequate? Can he tell the House how much money strikers are losing by staying on strike?

Mr. King: I am concerned. The loss suffered by each man is substantial. It will take a considerable time to recover those losses. Every day he spends on strike will further extend that period of recovery. I hope very much that there will be the earliest possible resumption of work.

Mrs. Shirley Williams: Is the Minister aware that the House has noted the remarkable change in tone of the right hon. Member for Manchester, Ardwick (Mr. Kaufman) compared with his tone earlier this week? Does the Minister recognise that the position is becoming more serious than his statement suggests? Both the North West water authority and the South West water authority have warned consumers that lead levels in water are going beyond the normal safety limits.
Will the Minister urge the Labour party to suggest that the trade unions should now negotiate on productivity? Will he give the House the assurance, for which I asked him on Tuesday, that there will be no Government interference with the National Water Council in respect of arbitration?

Mr. King: I give the right hon. Lady that assurance. If the matter goes to arbitration, it must be discussed by the arbitrator and the two representatives agreed by both sides. If I ever gave the impression that the dispute was not serious and did not cause real hardship in some parts of the country, I apologise to the House, because I regard it as a very serious dispute that is causing real suffering to many people.
The right hon. Lady mentioned the lead content of water. Warnings have been given about the need to flush pipes, especially where pregnant women and young children are concerned. Lead is especially serious as an accumulating poison, so one must put the matter in perspective. However, the problem is serious, and that is why I am anxious that the dispute should be resolved as early as possible.

Mr. David Penhaligon: Is the Minister aware that in some parts of the country no water means no back boiler, and no back boiler means no heat? Is he satisfied with the emergency provisions and will he talk to those in the Cabinet who are responsible for social security to see whether compensation can be offered to people to meet the cost of simply keeping warm?

Mr. King: I am grateful to the hon. Gentleman for raising that point because the emergency cover must take account not only of public health but of public safety. There is a risk that the dispute will affect heating and cause hypothermia. That is another reason why the dispute is serious and why it should be ended as soon as possible. In the meantime, those responsible and available will do what they can to help with the problems mentioned by the hon. Gentleman.

Mr. Tony Durant: Will my right hon. Friend, for the House's benefit, remind us about the increase in water workers' pay levels compared with the retail price index since 1979?

Mr. King: The increases have been significant. My right hon. Friend the Prime Minister mentioned an increase of about 54 per cent. since April 1979. This further increase will be significantly above the rate of inflation and will advance the position of water workers in relation to the increase in the retail price index. Water workers' wages were about 5 per cent. above the retail price index then and, if the offer is accepted, will be significantly more than that now.

Several Hon. Members: rose—

Mr. Speaker: Order. In view of the exchanges, does the right hon. Member for Crosby (Mrs. Williams) wish to make her application under Standing Order No. 9?

Mrs. Shirley Williams: In view of the exchanges, although I can think of nothing more urgent or important than this matter, I shall not press my application. However, I make it clear that that is done in the light of the good faith expressed by the Minister and the change in tone of the right hon. Member for Ardwick.

Detained Persons(Parliamentary Questions)

Mr. Arthur Lewis: On a point of order, Mr. Speaker. I am sorry that I have not had an opportunity to give you adequate notice of the point that I wish to raise—[Interruption.] If any hon. Member wishes to try to shout me down, will you please explain to him that I am the last person he should try to shout down because my voice is loud enough to overcome the opposition?
This morning I listened to an important BBC radio programme called "Checkpoint". The programme dealt solely with a matter that I have been trying to raise in the House for 20 years. I am not getting at any Government or any Minister, but every Member of the House. It is no laughing matter. Every hon. Member shares the collective responsibility for keeping 5,000 innocent people in prison, some of them for as long as two years, without trial and without the opportunity of stating their case. They come out after two years, having been told by a judge that they should never have been there. These people cannot obtain compensation and often lose their homes, jobs and businesses.
We are responsible, but we cannot ask questions about those cases because, technically, those 5,000 people are awaiting trial and the matter is sub judice. When, after two years, they are released, having been found innocent of all charges, we are then told that there is no ministerial responsibility. We cannot ask questions and they cannot obtain compensation unless they wish to go to the law again and lose much more money. It is shocking that every hon. Member condemns the Soviet Union, Argentina and other countries but that you, Mr. Speaker, I, and all of us have kept in prison 5,000 people who have committed no crime. They have no chance.
In Scotland, if the police take no action the prisoners are let out on remand after 100 days. May we have similar legislation here? If an unconvicted person has been in prison on remand for a reasonable period, may we come to you, Mr. Speaker, and ask for your permission to put down a question—you may consider that one month or two months would be reasonable—about when that person will be given a chance to come to trial? If, God forbid, I went outside now and shot the Lord Chancellor's wife in front of police witnesses, I would have a better opportunity of being treated decently than those who have committed no crime.
I ask hon. Members to obtain a copy of the transcript of that BBC programme. They would not sit there laughing. They would be disgusted that they have allowed this to go on for so long.

Mr. Harry Greenway: Further to that point of order—

Mr. Speaker: Order. Not "further", surely.
The House will be aware that I was kinder in listening to the hon. Member for Newham, North-West (Mr. Lewis) than I would have been to any Privy Councillor. I shall consider what he said and and communicate with him, because I realise that he has raised an important matter. However, I doubt whether I can do anything about it.

BILL PRESENTED

WATER AUTHORITIES (STATUTORY DUTIES) BILL

Mr. Gerry Neale presented a Bill to compel water authorities in England and Wales to require all their sub-contractors who, in the process of carrying out contracted works, cause negligent or accidental damage to, or the cessation of supply through, a water main, to reinstate the service immediately by effecting the necessary repairs; and to require all water authorities in England and Wales to credit all water and drainage ratepayers with a per diemrebate for all days for which supply or service is not available for any reason: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 73.]

British Railways (Serpell Report)

Mr. Albert Booth: I beg to move,
That this House opposes massive rail network cuts and commuter fare increases; and condemns the Government for its failure to reject outright the Serpell Report.

Mr. Speaker: I have selected the amendment in the name of the Prime Minister.

Mr. Booth: The publication of the Serpell report has lifted the curtain on the future of British Rail under a Conservative Government. It shows the unmitigated disaster that must flow from the Government's policy of starving British Rail of the investment that it needs for track renewal, new rolling stock and electrification.
The report damages the prospects for railways in three significant ways. First, by highlighting its options, it draws the attention of public debate to those options and away from the current crisis that is affecting British Rail. Secondly, by showing the worst horrors of these options, it will make other options, which would still mean serious cuts in our present network and service standards, appear more acceptable. Thirdly, it will detract from or delay decisions that are urgently needed on British Rail's investment proposals.
The whole thrust and direction of this report flows from the handling by the Government of British Rail's investment problems. Since they came into office, the Government have refused to make a decision on an overall investment plan for the railways. When they received the joint electrification plan, agreed unanimously between the Department of Transport and British Rail, which went to the Secretary of State's predecessor in December 1980, they refused to pick any of the four options clearly outlined therein for investment in the electrification of our main line network. Without such a decision it is almost impossible intelligently to plan investment in other parts of the system.
When British Rail pressed the Government on this matter, it was asked to go away and to do its sums again because assumptions had been made which did not hold good in a time of slump. When it came back, it was told to go away and to do the sums again, but this time to do them line by line instead of on a network basis. Then the Government said that the sums should be done on the basis of electrifying only those parts of the inter-city network that would be viable by 1985. So it goes on. British Rail has been told each time to do its sums again or to consider the problem from a different angle, but a decision on the essential matter of investment has never been taken.
There are wider and more serious refusals to face than a decision on this investment proposal. There has been no overall decision on the proposal by British Rail following the investigation by the Monopolies and Mergers Commission of the south-east railway services reported on in October 1980. Worse still, there has been no decision on the corporate plan for investment put forward for 1981–85 by British Rail, nor on the rail policy proposal for investment throughout the 1980s which was put to the Secretary of State in March 1981.
At any time a deferment of decisions for a major public industry on such a scale would be important, but in this case the issue is crucial, even vital, to the life of our railway network, because there was in that report a


statement that the decision was expected to be taken in 1981. It went on to say that if the new investment did not commence by 1983, British Rail would have passed a watershed beyond which there would be an inevitable deterioration of the network and services.
In May 1980, a document was sent by British Rail's chairman to the then Secretary of State summarising the effect of continuing the existing investment level over the decade of the 1980s. It said that if investment continued at that level, 3,000 track miles would have to be closed, the availability of locos would deteriorate enormously and large sections of track would have to be put under speed restrictions. That was clearly predicted to the then Secretary of State in May 1980, yet the investment expenditure of British Rail was not sustained even at that level; it was run down.
In 1981 investment by the board was 54 per cent. higher than in 1979. We kept telling the Secretary of State in the House that his investment limits would make absolute nonsense if he did not adjust the external financing limits of British Rail to enable it to go ahead with investment, but the idea was pushed aside. Nevertheless, this has happened and there has been a drop of £180 million a year in actual expenditure on investment in British Rail. Anyone who disagrees with this can look at page 41 of the Serpell report, which sets out actual investment expenditure under this Government.
Given the nature of the Government's approach to railway investment and the narrow terms of reference of the Serpell report, we are hardly entitled to be surprised that the report is both negative and pessimistic. Its terms of reference were to examine finances and report on options designed to secure improved financial results. There was nothing in those terms of reference about looking at the social implications of letting our railway network collapse, nothing about the effect of transport systems on our environment and, more especially, nothing about catering for the needs of the travelling public. There was no suggestion that British Rail should be examined in the context of an integrated transport policy.
The whole thrust of those terms of reference, like the whole thrust of the Government's approach, was to narrow down and to take the blinkered approach, which is to look at the books and to take the accountant's view in the middle of a recession instead of considering the fundamental needs of a transport system in a modern industrialised country where people need mobility.

Sir David Price: The right hon. Gentleman is perhaps being a little unfair to the terms of reference, which are:
To examine the finances of the railway and associated operations, in the light of all relevant considerations
In the hands of an imaginative committee, I suggest that that could cover everything the right hon. Gentleman has mentioned. Where one might criticise the Serpell report is that the members did not take their terms of reference sufficiently widely. It might be possible to criticise the interpretation of the terms of reference, but it would be wrong to criticise the terms of reference themselves.

Mr. Booth: The whole of the Serpell report carries the implication that the members understood that they were carrying out their terms of reference and that all the things to which they referred were the things they were led to

believe were relevant to the type of inquiry they were conducting. If this matter is as important as my right hon. and hon. Friends and I believe it to be, that should not have been left in doubt. The terms of reference should have clearly stated that the financies were to be examined in the light of the requirements of an integrated transport system or of the effect upon the social conditions of those who will suffer as a result of the withdrawal of the railway network.
Paragraph 5 of the introduction to the report spells out clearly what the members believed they were about:
our review has been concerned with the railway's finances, not transport policy.
What credence would hon. Members give to a report introduced by the Secretary of State for Education and Science which announced that it was concerned with school finances, not education? What credence would they give to a report introduced by the Secretary of State for Social Services which related to hospital finances, but paid no regard to health? If we take such reports seriously, we shall be accepting the madness of monetarist priorities.
The whole emphasis of Serpell is on cost-saving through cuts and fare increases. It offers no prospect of growth or of expanding services. Serpell is pessimism seeking to wear the clothes of realism. Viewed from the standpoint of public representatives concerned to maintain the transport services of their areas in the light of their knowledge of their constituents' needs, it does not represent a realistic approach.
The freight prospects are no better than the prospects for passengers. Having praised the Speedlink freight development as imaginative, the report states that the British Railways Board should not invest in it because the risks are too great. I put it to the Secretary of State that the risks of investing in Speedlink are only too obvious if the network is to be cut substantially. Those risks will not be lost on industrialists, who rely on rail services to maintain their industries. Those risks will not go unnoticed by those whom we should be persuading to take up section 8 grants to link their industries into our rail network so that rail can be used more effectively to provide for our freight transport needs.
Chapter 6 deals with engineering and raises the most alarming prospects not only for the reliability of our rail system, but for its safety. It estimates a saving of £92 million from a cut on continuous welded rail renewal. Paragraph 6·16 states that the track should not be maintained to a higher standard than is necessary. Paragraph 6·17 states that an experiment should be conducted to establish the lowest level of maintenance consistent with safety.
What reputable railway engineer would say that he could lower safety standards and that the line would still be safe or that the standards for signalling and locos could be lowered and that he would still vouch for their safety? That is an appalling suggestion. Standards of railway safety may be high in this country, but they are not too high for the representatives of the Labour party. Any experiment to reduce those standards could be carried to its logical conclusion only by risking the life and limb of British Rail passengers.

Mr. Dennis Skinner: The Government are not bothered.

Mr. Booth: What is worse is that Serpell admits that the cost savings listed in the chapter are defective. He admits that the report has not considered the adverse


effects on revenue from those savings. Serpell admits that the transitional costs of changes have not been evaluated and that he has ignored the investment costs involved in changing British Rail's maintenance arrangements. Therefore, that part of the report is an insult to those who seriously want to consider the implication of railway standards for Britain.
The report deals with British Rail Engineering Ltd. and the railway workshops, but there is no cost-benefit analysis of what is proposed. Instead, British Rail is condemned for buying British. I wonder whether there is any understanding between those who say that we should be patriotic and buy British and those who determine the financial guidelines of our nationalised industries. If implemented, most of the options would threaten not only the railway workshops, but the private industries that supply about 60 per cent. of the materials used by those workshops.
We are seriously concerned about the future of railway towns, such as Horwich, Shildon, and Swindon, whose communities have developed the tradition of serving British Rail's needs and wose workers have great expertise. They are undoubtedly capable of applying British Rail's superb research and development to meeting the needs of our railway network and exporting equipment. The threat of mass unemployment hangs over those towns.
I am told by my hon. Friend the Member for Westhoughton (Mr. Stott), in whose constituency Horwich lies, that a news sheet, published by one of the political parties represented in the House, states that the loco works may go by 15 May. I do not believe that. I do not believe that British Rail—and I hope that I am justified in saying that I do not believe that the Secretary of State—has any intention of announcing the closure of Horwich loco works, or any other such works, on 15 May. However, what a Front Bench Opposition spokesman believes does not constitute an authoritative position. Therefore, I call on the Secretary of State to do what only he can do and to set at rest the fears that have been stirred up in that town. I call on him to state categorically, either now or when he makes his speech, that no British Rail workshops will close as a result of the report. [HON. MEMBERS: "Answer the question."] The Secretary of State chooses not to answer now, but I trust that he will do so in his speech.
I shall deal briefly with the options in the report. Option A is the so-called commercial railway option. Conservative Members like things to be done in a commercial manner. The report's conclusion makes it clear that the options were studied at the direct invitation of the Secretary of State. Option A would mean a cut of 84 per cent. in the network. Just over 11,000 route miles would be cut to 1,630 route miles. The railway would serve Glasgow and Edinburgh by the west coast main line. Cardiff, Bristol, Bournemouth and Brighton, Dover and Norwich would also be served, and there would be the east coast line to Newcastle. According to Serpell, it would run at a profit of £34 million. What would be the cost to the community, to the country, to the people of Scotland—who would be virtually robbed of their rail service with the exception of Edinburgh and Glasgow—and to the people of the west country, who would not have any railway system? What would be the cost to the people of Wales, who would be left with only one railway service in the southern part of the country?

Mr. Harry Cowans: I am following my right hon. Friend's eloquent argument, but there is one aspect on which he has not touched. Even if the Government said that they would not implement the report immediately, and even if they had a regional policy—which they patently have not got—the decimation of communications in those regions that are trying to attract industry and investment would mean no chance of new investment in the northern region, Wales or Scotland.

Mr. Booth: My hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) has made an extremely important point. Our motion condemns the Government for failing to reject the report outright and underlines the wider consequences that will flow from implementation of the report. It certainly has the consequences for regional development alluded to by my hon. Friend.
Even if we regard option A as the extreme possibility—one that would not be implemented—as I hope we can, it would be very much in keeping with the Government's approach to choose option B, which is described as a resource cost minimisation network. The only significant difference between option B and option A is that it would maintain London commuter lines that cover costs—a total of about 2,200 route miles. That would leave BR with a defict of £19 million. Option B would be as unjust as option A to the hundreds of towns and millions of people who would be cut off from railway networks.
If those options are unrealistic—some of us feel that they are unrealistic to the point of madness—they could have been viewed in a much more worthwhile and objective context had Serpell been instructed to examine the investment proposals put forward by British Rail for electrification and investment through the 1980s to create a rail network for the future. Serpell does not do that. Instead, he erects an Aunt Sally of a so-called high investment option and then rules it out of court.
The Government's amendment makes it clear that they welcome the prospects raised by the Serpell report for the sort of agonising debate in which we are engaged and for further cuts. As in so many other areas, the Labour party has an alternative policy. It is a published policy that: will achieve main line electrification, the replacement of worn-out trains, the expansion of rail freight services; the necessary track renewal and modern signaling.
Although the Serpell report is negative, it cannot be ignored. Even if the Government do not implement any part of the report before the general election, should the disaster befall the country of another Conservative Government being returned, what is now a spectre will become a reality. It is not likely that we shall ever have another Conservative Government, but what is Likely is that, from now until the general election, the Government will continue to refuse to invest in British Rail. Since 1979 we have seen a serious cut in investment in British Rail. The denial of the investment that is necessary to sustain our railway network is an implementation of Serpell by stealth.
In rejecting the report, we say not only that we want no part in any of the options that Serpell has spelt out, but that we call for investment to provide our people and industry with the modern railway system that they deserve.

The Secretary of State for Transport (Mr. David Howell): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:


'welcomes the opportunities, following the Serpell Report, for informed debate about how to achieve a better deal for both the rail customer and taxpayer, and how to cut costs and raise efficiency and establish a clear and positive direction for the railway's future for those it serves and those who work within it'
I agree with the right hon. Member for Barrow-in-Furness (Mr. Booth) and many of his hon. Friends that the state of our railway system is not satisfactory, and that over the years it has been allowed to ossify—that is the word that has been used by British Rail—and that it is high time that a new, more creative and questioning approach was taken towards our railways.
We shall get nowhere by taking the attitude reflected in the motion, which says that when we ask the questions that could form the basis for a modern and successful railway future we must immediately slam the box shut because they are too difficult to answer. That is implied in the right hon. Gentleman's approach. It is a narrow-minded and wrong approach.
Although the railway system is not changing in the way that it should, in one sense a change has taken place. That change is in the taxpayers' contribution to the system. At 1982 constant prices, it has climbed from £664 million in 1977, to £702 million in 1978, to £768 million in 1979, to £774 million in 1980, to £891 million in 1981, to £926 million in the current year. That last figure means that the taxpayer is paying more than the fare-paying passenger to support the railway system. It is worth while reminding the House of those soaring figures when we hear so much about the denial of support for railways. In real terms, there has been a steady climb in social support for our railways system to the point when, for every passenger mile, the taxpayer is paying 5·4p and the fare-paying passenger 5·3p.

Mr. Philip Whitehead: Will the Minister now read out to the House the comparable figures for other European countries? Will he say why the Serpell report does not give any international comparison?

Mr. Howell: I shall provide, later, international comparisons of both social support and investment. I believe that those are important issues. To put it mildly, there have been some misunderstandings about the figures that have been bandied about.
It was against the background of soaring taxpayer support and British Rail's own anxiety that, despite the vast increase in real social support, it still felt unable to fulfil its commitment and remit. So BR demanded and urgently sought a review. I chose Sir David Serpell to head the inquiry and the committee. He is a director of British Rail. That decision was warmly welcomed by British Rail as being a major step forward and a positive start to the sort of review that British Rail had been urging.

Sir Anthony Grant: I apologise for intervening at such an early stage, but it is the right point at which to do so. Is my right hon. Friend aware that there has been grave disquiet because the report was leaked at an early stage, long before the House or any member of the public had an opportunity to see it? The report has been widely debated. Can he assure us that no leak took place from his Department? Does he think it significant that many copies were requested in advance by the British Rail chairman and by his public relations department?

Mr. Howell: I deeply share my hon. Friend's disquiet that what emerged were selective and highly distorted parts of the report.
The leaks were designed to give a wholly false and, in some cases, inaccurate impression of what went on. As soon as the report was received by me, a few copies were sent in confidence to the chairman and board of British Railways. Thereafter, orders were given rapidly to publish the considerable report with the accompanying tables, and it was brought to the House at the first possible opportunity.
British Rail warmly welcomed the appointment of Sir David Serpell and the arrangements for the report. Those matters were discussed with British Rail, and warmly welcomed. There was an urgency about the matter. BR was concerned that the report should make rapid progress. It is common knowledge—and has been since 1981—that the present chairman of BR, Sir Peter Parker, wished only to be reappointed in 1981 for a further two years. He has had those two years, and times have not been easy for BR.
During those two years, Sir Peter Parker, Bob Reid his chief executive, and their colleagues on the board have done a commendable job in getting to grips with some of the difficulties, management practices and restrictive practices, and also with the management reorganisation that was so clearly needed in British Rail and so clearly identified in the Serpell report. The difficulties were magnified by the way in which the Opposition went out of their way in the summer actively to support the disruptive action by ASLEF, which has done so much damage to British Rail.

Mr. Robert Hughes: The Secretary of State referred to the period of office for which Sir Peter Parker wished to be reappointed. Will he take this opportunity to deny a story in today's issue of The Standard to the effect that he intends to appoint a Mr. John Palmer—a senior civil servant in his Department—as chairman of British Rail at the end of Sir Peter Parker's term of office?

Mr. Howell: The report in the press is without any foundation, and is absolute rubbish. It is idle and, in some cases, malicious speculation. There is no truth in it whatsoever.
The Serpell report examined the action taken by British Rail. Sir Peter Parker, Bob Reid and others have made a major start on some of the inefficiencies and difficulties, especially in management information and control. The report says that there is much more to do. No one other than those who simply do not wish to discuss the issue can deny that. Sir Peter Parker told me in a note
we intend to be using the opportunity of the Reports to make the most of the challenge in them.
Sir Peter referred to planning, investment, engineering and financial information, and said:
I am sure that the Committee's work, complemented by the work that we have put in hand, will enable us to accelerate the improvements that we had in mind in these fields and respond positively to new points raised by the Committee.
What a sharp contrast that is to the wholly negative attitude of the right hon. Member for Barrow-in-Furness in everything that he said this afternoon.
The right hon. Gentleman made great play of the network options. He knows as well as I know that they are not closure plans. They do not present the Government with closure plans. That is made absolutely clear in the opening comments to the report. It is true that the report


raises questions—as did the 1977 Labour Government's transport White Paper with which, presumably, the right hon. Gentleman was involved—about the most cost-effective way of meeting local transport needs. By showing the costs of parts of the network the report illuminates the costs in relation to the revenues. That was what the 1977 Labour White Paper rightly said was the question that should be asked. It is asked with great clarity in the report. The right hon. Gentleman thought that it was the right question to ask in 1977. He thinks that it is the wrong question in 1983 because he has been shunted sideways in his position and his thinking. In 1977, the right hon. Gentleman was part of a Government who thought that that was the right question to ask.
When considering rural transport needs it cannot be right to set our face against the best use of resources, new technology, alternative and different forms of service that are cheaper for the passenger and which, if they are applied, will save rural services that might otherwise be threatened. The right hon. Gentleman spoke about the threat to branch railway services and other services. It was precisely the view embodied in his speech this afternoon—that we should not even think of different ways of using resources and new technology or of different ways of operating on the track—that guarantees that the services could come under threat. The need to look at them in a new way offers the best hope for saving our railways that might otherwise be threatened.

Mr. Dafydd Wigley: The Secretary of State said on 20 January that the most extreme options were not applicable. Will he say which options he regards as the most extreme? That would help us in the debate tonight.

Mr. Howell: I certainly rule out extreme options. That includes the option that Mr. Goldstein has since said was only included as an example and was not practicable. I refer to option A which is, nevertheless, an important illustration of a purely commercial railway. It shows just how far we are from having a railway system that can cover its costs. It is a valuable illustration, but not a practicable option.
A great deal of what the right hon. Gentleman said turned on the point that our railways have been starved of investment. It is true that during the past two years, and especially last year, although there was no restraint on the investment ceiling, the actual amount of investment fell away. That is a matter of great regret. However, in considering why it fell away, the right hon. Gentleman might chose his words a little differently. British Rail was unable to invest up to the ceiling allowed by the Government because large sums of money—hundreds of millions of pounds—were siphoned away in pointless industrial disputes, which inflated costs. During the summer, the right hon. Member for Ebbw Vale (Mr. Foot), the right hon. Gentleman and other Opposition Members actively supported ASLEF in a futile and monstrous strike, which drained millions of pounds from the British Rail system. It is, therefore, a bit much that the right hon. Gentleman should lecture us today about the fall in investment on British Rail, which we all regret but the cause of which we know so well.

Mr. Booth: If the right hon. Gentleman seriously believes that, will he explain why both he and his

predecessor refused to approve British Rail investment plans in the 1980 rail policy before there was any question of a strike?

Mr. Howell: I shall deal in a moment with a whole range of investment plans that have been approved. One that the right hon. Gentleman might ponder is that symbolised by the new electric rolling stock now at Cricklewood, with willows growing around it, which was meant to run on the Bedford-St. Pancras electrified line—£150 million of taxpayers' money has been spent on it, but it has not been operated because of restrictive practices on the railways. That is one example of investment undertaken in good faith, where the other side of the bargain has not been kept.

Mr. T. H. H. Skeet: That piece of railway has not been in action for a year because of labour troubles, and the losses amount to £160,000 a week.

Mr. Howell: My hon. Friend reinforces the reality of a sad story—one that shows that the charge that the problem turns solely on lack of investment projects and expenditure cannot be sustained.
The hon. Member for Derby, North (Mr. Whitehead) referred to international comparisons. It is true that British Rail is investing at about half the level of the SNCF. It may have something to do with the fact that our railway system is only half the size of the French system. It may also have something to do with the fact—and I fear that it has—that on almost every measure of productivity our railway is still performing at levels well below those on the French railway. If we could have secured the manning levels of the French railway, if we could have avoided the affairs and incidents that took place last year—which drained money away from the railways—it would have been possible for British Rail to have achieved the investment level that we would all have liked to see. But for the right hon. Gentleman to dismiss, ignore and not even mention those aspects, and to return again and again to the proposition that it is really just a question of pushing up investment, is really to shut his eyes tight to the real problems, which we must solve, facing the railways in the future.

Mr. Robin F. Cook: rose—

Mr. Howell: I shall not give way any more because it is time we heard a few facts.
I shall list some of the investment approvals for this year. They include the west of England resignalling, the Anglian electrification programme, the lightweight diesel multiple unit investment, an entire generation of new ticket machines and the Glasgow-Ayr electrification. Those are important projects. We also accept the case for a major new investment in the Tonbridge-Hastings line, although a decision has yet to be taken on precisely what form that will take. So any suggestion that no investment is going on—I think at one stage the right hon. Gentleman used that phrase—is again false and misleads people about what is going on in British Rail.
The right hon. Gentleman did not touch on new organisation, which is part of his general wish for British Rail's affairs and problems not to be discussed and debated, but to be pushed constantly aside. During the past year, Sir Peter Parker and Mr. Bob Reid, the chief executive, have developed the concept of what they call sector management, which is, for the first time in the


history of the nationalised enterprise, organising the different sectors and the different businesses under separate management structures. That is an excellent start. It immediately throws up healthy questions—the right hon. Gentleman does not seem to like questions about British Rail—within the different sectors as to whether they have to buy in from the central services, and whether to pay overheads to run the inter-city business or the freight business in the way that they have in the past. These are healthy management developments.
I also noticed that during the Serpell inquiry the board of southern region put forward the proposition that southern region might be organised as a separate and independent company. The board put that forward for good reasons concerned with management, loyalty, good work practices and a good service to the passenger and the customer. If the right hon. Gentleman will not consider the issues raised by the Serpell report, and is not interested in the future, may I persuade him—may I try to turn his mind—to begin thinking about a structure for our railways and for British Rail in the future that is an improvement on the pattern that we have inherited over the past 30 years, which has come down to us from vesting day in January 1949? That is a long time for any single organisation to stay in one mould. The right hon. Gentleman and his hon. Friends would do a much greater service to the railways if they would open their minds and began the debate on these issues instead of rushing to table a motion saying that the report should be dismissed and suppressed.
I suggest also that the right hon. Gentleman might open his mind, although I do not believe that he will be able to do so, to the opportunities of private capital. There are certainly opportunities, recognised by British Rail although not by the right hon. Gentleman, for joint ventures and for opportunities with private capital. I do not know what is the right hon. Gentleman's mood on this issue. I have seen reports in the newspapers, as he has, that there is a possibility of private catering operating on some British Rail lines. If I say that I encourage private catering, will I then be accused by the right hon. Gentleman of public sector asset-stripping? I suppose I will, but I believe that that would be a wholly negative attitude.

Mr. W. R. Rees-Davies: This is a totally new matter. Will my right hon. Friend invite Sir Peter Parker to consider having private catering of an attractive fashion at, for example, Victoria station, and on the different stations down the line? Will he also encourage the reintroduction of the great trains, which carried prestige—the Thanet Belle and the Brighton Belle? Such moves could bring real attraction to the railways again.

Mr. Howell: My hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies) is wholly correct. The dismissive attitude of right hon. and hon. Members on the Opposition Benches only typifies their negative attitude to the future development of the railways.

Mr. Frank Dobson: rose—

Mr. Howell: I will not give way again because time is getting on.
One of the worst things that British Rail did in the last decade was to get rid of the Brighton Belle. It was a sad decision and contributed to the poor image of British Rail.

Mr. Dobson: rose—

Mr. Howell: I should like to refer next to engineering costs—

Mr. Dobson: rose—

Mr. Howell: These are serious matters.
The right hon. Gentleman spoke about the problems of British Rail Engineering Ltd which are, of course, examined in the Serpell report. I should have liked him to make reference today—and possibly given some recognition and welcome—to the new overseas order that has been secured for BREL. It is the first substantial order for British industry in the French-speaking part of Africa and is a major achievement. It is, in a sense, a real first. I am glad indeed to note that the credit terms that were made available and agreed with the Government helped to secure this order. So, when the right hon. Gentleman talks about the future of British Rail Engineering, and the worries, which of course there have been—but they did not start with the Serpell report—about the future matching of capacity to orders, it would be fairer and more constructive for those concerned if he were to concentrate on the possibilities for developing orders for the future and for opening up the type of export markets that are secured by the order to which I referred, which is announced in the newspapers today.
I believe that that is the right approach. Serpell was as concerned as the right hon. Gentleman with the future of the engineering part of British Rail. The committee looked constructively at options and ways in which the capacity and employment could be secured for the future. Refusal to discuss it, refusal even to contemplate the need for change, is a guarantee of growing difficulties. It is not the type of attitude that the Government are prepared to take.

Mr. Leslie Spriggs: rose—

Mr. Howell: I have given way a great deal and I will not give way again.
I have touched on some of the points that the right hon. Gentleman raised in his negative contribution. It is apparently his view and that of some of his right hon. Friends, although it is not the view of many within British Rail and certainly not the view of many of those in the management of British Rail who want to get on to build a modern railway, that we should reject reports and examination, and light and illumination. One of his hon. Friends was even demanding that we should burn the report. That is not a healthy approach to books or reports in a free country.
The reality is that, like much else in this country, railway reform should have been tackled years ago. Those who have persistently resisted change and called for the rejection and supression of reports have befriended not progress but decay. In the short term we all know, and the report emphasises, that cost savings are essential, that further substantial cost savings and management improvements can be achieved. The report is clear about that. In the longer term, after 30 years of nationalisation, we clearly need a better structure for our railways. I believe that the Serpell report provides a stepping stone


which should be welcomed and used as an advance towards that better railway. I urge the House to reject the right hon. Gentleman's myopic motion.

Mr. Deputy Speaker (Mr. Paul Dean): Before I call the first Back-Bench Member, Mr. Speaker has asked me to appeal for brief speeches, as there are many hon. Members who wish to speak in the debate as well as four right hon. Members.

Mr. William Rodgers: It is only right to say at an early stage in the debate that for over 30 years successive Governments have tried with more or less conviction to create an efficient railway system and none has wholly succeeded. When I was Secretary of State for Transport I said that there should never be another Beeching and I am happy to repeat that today. Just as the Beeching report, published exactly 20 years ago, led to an arid debate because of its proposals, my fear is that the Serpell report will also result in aridity, while a creative and rational debate is what we need above all.
The attempts of successive Governments to create an efficient railway system have not succeeded. Whoever has been in charge, all the problems have not been solved. It is no good sweeping them under the carpet and pretending that they do not exist. It is no good pretending that the House should not debate them from time to time. We want value for money from our railway system and value for money for the subsidy that we pay and must continue to pay. It is not apparent to me that we are necessarily getting that today.
Having said that, it follows that this is the wrong report at the wrong time. It was an error of political judgment on the part of the Secretary of State when he commissioned it. That error was compounded by the appointment of Mr. Alfred Goldstein to the committee and the appointment of R. Travers Morgan and Partners as consultants. I say that not only because of the controversy that has surrounded the appointments and the somewhat polemical statements made by Mr. Goldstein but because it was a mistake to appoint Mr. Butler of Peat, Marwick, Mitchell and Co. when that company also became consultants for the committee.
The Secretary of State may say that there are precedents for appointments of that kind and I am not saying that that may not be the case. However, it was an error and I hope that the Secretary of State will reflect upon it. There is a good case for ensuring that when an independent committee is appointed, those who are properly paid as consultants to it shoud have no professional relationship at all with members of that committee. I hope that that will be borne in mind and that the Secretary of State will realise that although he made the appointments in good faith—and I do not doubt the probity of those involved—wisdom would have suggested a different course.
It has been said that the report is a botched job and that it is full of technical oddities. That may be so. May I say in passing, in relation to a remark made by the Secretary of State, that I am prepared to stand by the White Paper, Cmnd. 6836, published in 1977 for which I was responsible? I confirm that the right hon. Member for Barrow-in-Furness (Mr. Booth) was also a member of the Cabinet at that time.
In drawing attention to the report's inadequacies, let us at least concede that there are some facts in it of which we

ought to take account. The fact that we reject its conclusions should not make us blind to some of the statements and comments in it. For example, paragraph 2.18 of the report says that there is a need for a thorough examination of the present season ticket discount. No one can reasonably object to that. Paragraph 2.28 says that the provincial sector's average load factor is only 20 per cent. That is very depressing, whatever conclusion we may draw.
In paragraph 2.33 it is said that many of the provincial services represent poor value for the public. Indeed, for whatever reason, they do provide poor value for the public. I want no massive cuts or swingeing fare increases and reject both but we should recognise where the money now goes in drawing conclusions about where it should go in future.

Mr. Robert Adley: Is the right hon. Gentleman going to point out that most of the services that suffer from low load factors are those that are kept open under a social grant at the request of local and central government? British Rail is not insisting on keeping them open for the sake of it.

Mr. Rodgers: I am well prepared to say that that is the case. If those are services maintained with public money, a load factor of 20 per cent. is disturbing. I am not commenting on any one particular service, but that is something of which we should take note if we are to have value for money and if the railway is to serve its customer, which is what it exists for.
It is true that the British Railways Board has been overoptimistic about freight and parcel trade. I regret saying so, but that is the case. As Secretary of State for Transport I decided to return Freightliners Ltd. to British Rail. I believe that I was right to do so but British Rail will say that Freightliners has not been as successful as it had hoped. It is right to note that it made a loss of £6½ million last year in determining where the future should lie.
I was also responsible as Secretary of State, as is set out in the White Paper Cmnd. 6836, for widening the scope of section 8 grants and I am glad that they have been widened still further. Yet, despite all that, it is a matter for note and regret that the railways have not succeeded in attracting as much freight as I should like to see.

Mrs. Gwyneth Dunwoody: Has the right hon. Gentleman noticed during his myriad other ditties that there has been a recession since he was Minister of Transport?

Mr. Rodgers: Indeed, I have. I do not hold the railways responsible for the problems and nor have I said that I do. But it is crazy to be blind to these considerations. If we want to ensure that the railways have a proper future we should face the facts and not be blind to them.
The British Railways Board has said that the London and south-east region alone loses £12 million through evasion of payment of fares. That is a serious matter and the House should support anything that the British Railways Board does to try to prevent evasion on that scale.
I agree with the right hon. Member for Barrow-in-Furness about the importance of investment but the House cannot get away from the fact that investment can be unproductive as well as productive. My first act as Secretary of State was to authorise investment in the St.
Pancras to Bedford line. There can be no justification for the fact that trains are not running on that line today and that is an indictment of both management and trade unions. Investment must be productive and I am in favour of more, but once it has been made both management and unions must use it to best effect.

Mr. Peter Fry: The right hon. Gentleman said that the evasion of fares on southern region alone amounted to £12 million. Why has British Rail given such a low priority to the idea of automatic ticket collection, which would do away with such an enormous loss? British Rail should be criticised for not promoting a scheme that would increase its revenue.

Mr. Rodgers: As the hon. Gentleman rightly says, the Serpell report comments on methods of collection. I do not want to refer to them further. I am only saying that the British Railways Board has made clear the scale of the evasion and £12 million would be a significant sum even if it were for the whole of the railways, which it is not.
In the White Paper of 1977 it was said that there had been a national decision to maintain a national railway. That is correct and that is what the House should endorse today. But it is important that that national railway should not only be modern and extensive and sustained by adequate investment, but that it should have efficient working practices, good industrial relations and a significant level of public subsidy. Because a significant public subsidy is essential, options A and B in the Serpell report are nonsense and the other options are unacceptable to a lesser or greater degree.
I do not blame the committee in so far it was given only seven months to complete its report. I agree with the right hon. Member for Barrow-in-Furness that we cannot blame the committee in so far as its function was to mark out opportunities and options within a narrow compass. For that reason it is not surprising that the report is unlikely to satisfy many right hon. and hon. Members. It is superficial and muddled and, most important of all, it has missed the biggest opportunity. We cannot excuse the committee wholly but we should principally blame the Government for the time scale, the terms of reference and the failure to produce a plan.
I do not rule out the possibility of some competition in catering. I do not rule out the possibility, nor does the British Railways Board, of some bus substitution, given guarantees which were absent 20 years ago. I do not rule out a degree of regional autonomy of the kind, as the Secretary of State said, that the board proposes. I do not wholly rule out, provided that it does not affect the nature of the network, some private services on British Rail track. It would be wholly compatible with the idea of preserving a national railway were the board to choose to proceed in those directions.

Mr. Donald Anderson: Will the right hon. Gentleman accept that the new kites that are being flown about regional autonomy and new structures beg the question of finance? Questions about financing social lines will remain, however much one tinkers with the structure.

Mr. Rodgers: The hon. Gentleman is right. These are all factors that must be considered. But if we want to

preserve a national railway network, which I do, and if the House recognises that there must be a subsidy, this does not preclude some constructive thinking in new directions.
I praise Sir Peter Parker's leadership. From the beginning, he identified himself with the railway. He was no doubt irritating from time to time to Ministers including the present Secretary of State. But his commitment to the railway system has been outstanding. He has dragged a rather reluctant and somewhat conservative board into new ways of looking at the system. In my view, it has not been the chairman's fault if the board has sometimes lacked imagination and will.
It is for the Government, answerable to Parliament, to decide what type of railway system they want and the terms upon which it should exist. There are two obvious fundamental choices. We could say that there will be no changes of any kind in the railway system as far ahead as we can see: it will be run as it is today with few changes at any level. There will then be an open-ended commitment to subsidise the cost. That is one choice which it would be proper for the House to make should it wish.
The second choice is for there to be a substantial subsidy, but the figure having been determined the railways should operate within it. In my view, the second choice is right. We should recognise that the railways need a substantial subsidy. We should decide what we want the railways to do and having made that decision we should determine the sum of money and let them go ahead.
On Tuesday this week the public expenditure White Paper was published. It is worth looking at some of the substantial sums of money that we spend. During the year 1982–83 we spent £770 million in grants and subsidies to agriculture, irrespective of the common agriculture policy; £818 million on general industrial assistance; £791 million on the coal industry; and £1,163 million on general housing subsidies.
Compared with those figures, the present figure of £862 million for the railways is not far out of line. We must determine the sum in the light of what the railways are expected to do. However, I do not believe that we can have an open-ended commitment. We should discuss what type of railway we want. We should decide what the House and the Government are prepared to pay for it. We should ensure that the board and its chairman are up to their job. We should then give them the freedom to get on with it.
There is a proper level of support, and there is such a thing as managerial independence. I should like to see the industry held much more at arm's length. Given the support, the industry needs stability and today's debate should point in that direction.

Mr. Robert Adley: This afternoon Mr. Speaker made a statement about Prime Minister's Question Time. He said that the House is, perhaps, better at diagnosis than cure. We all know what is wrong with the railways, and we all think that we could run them better than the British Railways Board. However, when it comes to putting forward specific cures there has been an ominous silence from successive Governments.
At the beginning of our proceedings today some of us prayed. We said that we would not allow "prejudices, and partial affections" to be reflected in what we said or did as Members of Parliament. I should be wrong if I did not


declare that I cannot guarantee to abide by that. It will be known by a number of my colleagues that I am a keen supporter of the railways and hope constantly to see them prosper.
I was a little disappointed with the speech of the right hon. Member for Barrow-in-Furness (Mr. Booth). However, I agree with him that the point raised by Serpell about experiments with safety was nothing less than grotesque. If we carried that type of experiment to its logical conclusion we should make the railways less and less safe until people were killed. It is incredible that anyone who expects to be taken seriously could put forward such proposals in 1983.
I should like to add my welcome to that of my right hon. Friend the Secretary of State and the right hon. Member for Stockton (Mr. Rodgers) to the experiments that have been announced by British Rail on its catering services. It is essential that we conduct experiments on our railway system, other nationalised industries and industry generally. My right hon. Friend the Secretary of State used the word "ossified". It is a word that has been used by the chairman of the British Railways Board and, indeed, the railways will ossify unless we experiment with them.
The difficulty with a speech such as this is to know what to leave out. The right hon. Member for Stockton talked about the problem of R. Travers Morgan and Partners. I do not want to go into that matter too deeply, but paragraph 3.01 of Mr. Goldstein's minority report says:
Though each form of transport has throughout history created cultural and social change—and railways particularly so—each has been overtaken, in some or all aspects, by successors.
When one reads that passage, one knows perfectly well the line that Mr. Goldstein will take.
However, I want to raise one point about R. Travers Morgan and Partners. I question whether consultants from the Sydney and Adelaide offices of that organisation are the best people to produce a report on our railway. If one looked for two countries which were geographically different it would be hard to find two that are less alike than Australia and Great Britain.
I do not say this in any spirit of animosity towards my right hon. Friend, but I believe that the way in which the report was presented to the House was unsatisfactory. There will always be leaks when a massive document such as this is produced and four or five weeks elapse between the preparation of the report and its final presentation to Parliament. I cannot understand why the Government, with this report, and previous Governments with similar reports, cannot present the report as soon as it is in the Minister's hands and say "There is the report. The Government will not comment immediately. We shall present the report, lay it before the House and debate it in five or six weeks' time." That would save a great deal of anguish. Unfortunately, many people now believe that the Serpell report is Government policy. It is not.
Some commentators and some of my hon. Friends have suggested that there is very little good to be said of British Rail and that it has stood still over the years. I am not an ardent supporter of every aspect of British trade unionism, but when the railways were nationalised in 1948 they employed 695,000 people, whereas by the end of 1982 the figure had fallen to 213,000—only 30 per cent. of the original work force. We should consider the enormous changes that the railways have willingly undergone,

usually without industrial trouble, before we make swingeing accusations about their unwillingness to accept change.
It is disturbing to note that, although the Serpell committee found time to produce all these documents and plans to decimate the railway system, it apparently had no time at all to make any international comparisons. Comparisons may be odious, but one is certainly worth making. The percentage of total costs financed from revenue has been stated as 55·5 per cent. in France, 58 per cent. in West Germany and 71·2 per cent. for British Rail. Admittedly, those figures date from 1977. No later figures are available, not because British Rail is unwilling to produce them but because its European competitors were sat upon by their respective Governments for allowing their own figures to look so unattractive compared with those of British Rail. It would be interesting to see the latest figures.
I regard the Serpell report as useless as a basis for decisions about the future of British Rail. Parliament has to make political decisions, but the report does net address itself to two fundamental questions. First, do we need a railway in Britain? Secondly, how much are we prepared to pay for it? Some of my hon. Friends might answer the first question in the negative as I am afraid that some of them are so hostile to the entire public sector as to allow that to colour their judgment. The extremists on one side would like to return to the days of the Glasgow and South-Western Railway, which will never happen, while the extremists on the other side will not contemplate any experiments, trials or introduction of private capital. I agree with the right hon. Member for Stockton that unless we are prepared to consider new ideas our railway system will quietly rot away.
I suggest to my hon. Friends that we cannot expect Sir Peter Parker to achieve what no other railway in the world can do—to run at a profit while maintaining a social network. No one can set right overnight problems of this magnitude, whose difficulty we all understand and with which we must grapple. The House must grapple with these problems not only in relation to the railways. Conservatives seek to grapple with the problems of modernisation of trade union legislation, of law and order and of rates reform to name but three items. If we are prepared, as we must be, to accept justified criticism on all those issues, we must show a little more tolerance to the management of the railways as they struggle with the difficult problem of running the system effectively and efficiently.
To pretend that all is well with the railways is neither accurate nor sensible. We must ask ourselves what on earth we expect of the railways. The assumption in some quarters that they can be compared with, say, an ire cream factory is ludicrous. We must look far more closely at the position of the railways as part of the nation's transport infrastructure. We must compare the amount of money spent on railways with that spent on roads. The railways cannot be regarded in the same light as British Leyland or the British Steel Corporation. British Leyland builds cars, but so do other people in this country and abroad, The British Steel Corporation produces steel, but so do many other people around the world. British Rail, however, is part of the nation's transport infrastructure, and if we do not fund it and keep it going nobody else will—certainly not the Japanese, who are far too busy putting money into their own railway system.
The use of terms such as "privatisation" and "subsidy" raises another fundamental question. Whoever talks about privatising the Royal Navy or refers to the large funds received by numerous companies as "subsidies"? I am delighted that over the years Hawker Siddeley, for example, received massive sums to develop the Harrier, but we refer to that not as a subsidy but as an investment of taxpayers' money in a project that we believe to be in the national interest.

Mr. Rees-Davies: Will my hon. Friend go this far? Does he agree that there is no reason why we should not consider the possibility of private catering on the railways or developments such as the Thanet Belle? There is no reason to suppose that the hotel side could not be better organised with private investment, thus providing some of the capital investment in the railways that he wishes to see while lowering the subsidy that he agrees is partly necessary.

Mr. Adley: My hon. and learned Friend may not have been present or may not have heard me say that I strongly favour such experiments. This morning, I left London at 5.30 am and travelled back on the 6.50 am train from Brighton. I was able to discover the views of people on that train about the privatisation of the catering services. There was strong support for the idea. I certainly support such experiments to try to bring in private capital, but we fool ourselves if we imagine that bringing private capital into the catering services is anything more than tinkering at the edges of the problem.
We must ask ourselves when a subsidy is a subsidy and when it is an investment in technology. I am delighted to support my hon. Friend the Minister for Industry and Information Technology in putting public money into the microchip. That is certainly an investment, but I suppose that those who object to any money going into the public sector would call it a subsidy. Fewer words of abuse might be good for all of us. The investment in British Rail technology is puny when compared with that of the French.
Again, when we put money into British Leyland, are we not putting taxpayers' money into the road transport industry of this country? I find that perfectly acceptable, but it is ultimately putting public money into part of our transport system. We shall be failing in our duty if we do not far more closely identify the comparative sums that we put into road and rail.
The railways suffer from one great problem. Every item of their expenditure can be identified. The same is not true of the road lobby. If somebody drops litter in Lymington high street or paints graffiti on a public building, the ratepayers bear the cost of cleaning up. The million and one trivial items of that kind add up to an enormous sum that British Rail must include in its costs, while the road sector does not.
Yesterday I was in Bristol, and I declare an interest as a trustee of the Brunel Engineering Centre Trust. British Rail is giving £100,000 to a very worthwhile project there. That is the type of project that people expect from British Rail. Nevertheless, we cannot expect British Rail to participate, for instance, in payments like this, or in the preservation of hundreds of archaeologically important buildings and in the next breath talk about profit and loss as though we were dealing with that ice cream factory.

There are assets and liabilities in any balance sheet. The liabilities in the roads sector include accidents, pollution, congestion and land use. If we make a fair, full and honest comparison, we shall find a picture very different from that painted by the Serpell report.
Whoever asks how much profit or loss the M6 made last week? I should like to quote some simple figures about accidents. Over the past 14 years, 526 people have been killed by accidents on British Rail, 2,660 people have been killed by violence in Northern Ireland and 105,000 people have been killed on the roads. I do not see anywhere in Serpell an evaluation of human life when discussing costs.

Mr. Stephen Ross: Is the hon. Gentleman aware that about 300 of the deaths on British Rail are caused by suicides rather than accidents?

Mr. Adley: The hon. Gentleman is right, but it is part of the price that British Rail has to bear in these statistics.
In 1982 alone the cost to the community of road accidents was astronomic. It was £5,250 million. It is intolerable and unfair that these figures are not used in comparing road and rail.
There is also safety. What would the road transport industry do if Parliament laid upon it the safety obligations that we lay on British Rail? It would be unthinkable, and yet for 150 years the House has been legislating for the railways and telling them how to operate. Most of us would agree that safety standards are, among other things, very important.
Some of the ideas canvassed about the railways are ludicrous, such as the suggestion of concreting them over. Just imagine two road vehicles, not on fixed tracks, passing each other at 80 miles per hour on bridges where the parapet walls are less than 3 ft. away. It would be unthinkable. Not many weeks ago there was a rather unpleasant road accident in a road tunnel in Afghanistan and that is what might happen here if some of these dotty ideas are allowed to gather force.
As hon. Members we find that we are always in favour of prisons provided they are not in our towns. We are in favour of playschools, provided they are not in our street. We are in favour of cutting expenditure, as long as it is not in our constituencies. We are all in favour of reducing the so-called subsidy to the railways, as long at it is not on a line that serves some people who might vote for us at the next general election. This is why we are dealing with a political case that has to be dealt with not by learned reports from consultants coming from Adelaide or Sydney but by people elected to this House to make political decisions.
For too long British Rail has been the Aunt Sally of successive Governments. It has occasionally been given clear-cut targets and when it manages to meet them it is rarely thanked, but when it does not meet them we have been quick to criticise it.
My right hon. Friend the Secretary of State mentioned the Bedford-St. Pancras line. Labour Members will know from the tone of my speech where my heart lies, but they must recognise that when there is massive public investment in a line such as this and it then lies idle it is futile to expect this to not colour the attitude of the Government, who have to make decisions on the expenditure of public money. Rather than dragging the subject up again, I plead with Labour Members to do anything and everything that they can with their friends in


the railway trade unions to stop this. Every time I advocate investment in the railways, many of my right hon. and hon. Friends simply say "Bedford-St. Pancras".
I was intending to read some letters that I have had from Conservative supporters, but I do not have the time. We in this small island invented the railway, and we have been left a magnificent legacy of railway tracks that we should be able to utilise to maintain and build up a decent modern railway system on our small, overcrowded island. I, for one, am not prepared to stand by and see this or any other Government destroy a precious asset, either by starvation or murder.

Mr. David Ennals:: The hon. Member for Christchurch and Lymington (Mr. Adley) made a refreshing speech and took us away from the narrow issues of profit and loss. If only the Secretary of State had made a speech that was in any way comparable in terms of its commitment to British Rail, he would have achieved unanimity in the House. He could not, because he would have been sacked. Instead, he gave a dismal and negative speech, partly because he had given inadequate terms of reference to the Serpell committee, and forced it to do a job in a short time. Inevitably, it did a bad job. The vagueness of the definition of its task and its narrow interpretation have led to a blinkered and myopic report.
There are some interesting statistics in the report, but there are many other statistics that are not there. It does not offer the way forward, either for British Rail or for the transport system as a whole. There are some absolute failures in the report, largely because of the narrow terms of reference.
No attempt was made to look at an integrated transport system, looking at the problem of buses, coaches and cars—the whole road service—together with the rail service. The bus substitution proposal was an alternative, but I fear that there will be problems. Commitments may be entered into on many under-used lines to have bus services—I hope they will be run by British Rail—that would provide the same service, and link in with British Rail timetables. Before we know it, the timetables will be changed and the services will cease to be integrated. Rural areas already have suffered a cutback in bus services, not an expansion.
There has been no attempt to look at the social consequences, particularly of the more drastic options. There has been much talk about leaks, and there were leaks in the more responsible papers today to the effect that the Secretary of State would rule out some of the more radical options. However, he ruled out only one today, the first one. The right hon. Gentleman did not rule out B or C3 which I find almost as offensive and damaging to our rail structure as the one that he has ruled out.
The committee made no attempt to look at the social consequences of some of these options, or at the effect on employment in areas that would be cut off from rail services. This concerns not only employment now but opportunities for developing employment in the years that lie ahead. The committee made no attempt to look at the effect on the standard and quality of life of those in rural areas who suffer enough as it is—I know that from my county of Norwich. There was no apparent study of such economic consequences as the effects on industrial

employment prospects. In my constituency, the towns of Norwich, Lowestoft and Yarmouth would be decimated if proposals B or C3 were to be carried out.
There is also the effect on the resorts and tourist centres, which are still important. Again locally—we inevitably relate the matters to ourselves—towns such as Yarmouth and Cromer know that the rail link is vital for tourist access.
As other hon. Members have pointed out, there is also nothing in the report about how other countries finance their railways at a much higher level than we do. I find this extraordinary. I was looking at the most recent figures, for 1980. If we take Austria, Belgium, France, Italy, the Netherlands, Switzerland and West Germany, 0·81 of their gross domestic product went in financial assistance—it is not called subsidy—to the railways. However, in the same year in Britain it was 0·29 per cent. We thus spend less than a third of what other countries do in terms of gross domestic product.
Electrification is absolutely vital for our main lines but the only comment about it in the report is negative, and comes in paragraph 8·14. The hon. Member for Peterborough (Dr. Mawhinney) referred to this when we questioned the Secretary of State on his recent statement. I want an assurance that there will be no going back on commitments to complete the electrification of the London to Norwich line.
In the second half of my speech, which I shall keep brief because I know that other hon. Members wish to speak, I shall concentrate on the horrific effects on East Anglia, especially Norfolk, of options B and C3, which the Government are still considering. After Scotland—certainly we shall hear from that area—Wales—certainly we shall hear from that area—and the south-west—and we shall certainly hear from that area—the area that is most seriously affected by these proposals is East Anglia, and the county in East Anglia that is most seriously affected is Norfolk. I therefore have an obligation to say that these proposals are totally unacceptable.
First, the proposals would be a body blow for Yarmouth and Lowestoft. The right hon. Member for Lowestoft (Mr. Prior) is not in his place, because he is in Northern Ireland, but I suspect that he shares my feelings about the loss of the rail link to Lowestoft. I am staggered that the hon. Member for Yarmouth (Sir A. Fell) is not here today, because Yarmouth is a "golden rail" resort. It is one of the major holiday resorts in the United Kingdom, and it has an important link with the continent through its port. That would be greatly undermined, because 14 per cent. of the travel to and from Yarmouth is by rail, as opposed to road. The whole prospect of developing the port-rail link in Yarmouth near the Vauxhall station would fall apart.
I am staggered that the hon. Member for Norfolk, North-West (Mr. Brocklebank-Fowler), who represents King's Lynn—whichever party he represents these days—is not in his place. There the result would be "absolutely horrifying" if option B or C3 were carried out. Those were the words of the president of the chamber of trade and commerce for King's Lynn.
Sheringham, Cromer, Fakenham and North Walsham would all be cut off. We must consider not only the people who live in that area but, as this debate is all about finance, the ability to finance main lines. If people cannot get to the main lines, there will be fewer on the inter-city lines. Those lines will cease to be profitable if people cannot get into Norwich and then move to the single route to London.
It will affect not only business men who have to go to London, but shoppers who want to come to Norwich. I quote the words of the Sheringham chamber of commerce:
Closing the line to Sheringham would be a disaster".
There is no route to Cambridge. People may ask "Who wants to go to Cambridge?" The hon. Member for Cambridge (Mr. Rhodes James) is not here, and I find that surprising. There is no rail route to the north, no way of getting to Birmingham or of travelling to Scotland—only to London and then northwards, as though London were the centre of life. By cutting out all branch lines to Norwich, the planners would also take away the feeder routes that help to keep the main line to London effectively used.
Finally—as you know, Mr. Deputy Speaker, my contributions are always brief, and I am glad to see you shaking your head, encouraging me to be so this time.

Dr. Brian Mawhinney: rose—

Mr. Ennals: Very well, I shall give way.

Dr. Mawhinney: I suppose it is good that at least one East Anglian Member should say he is here, after what the right hon. Gentleman said. He knows that I, like all East Anglia Members, share his view that East Anglia tends to be one of the forgotten areas of the country. Will he tell us whether there is any limit to the subsidy that should be paid to all the lines about which he is telling us, or should they all be subsidised without any limit by the Government?

Mr. Ennals: I am not suggesting that there is any line in East Anglia or in any other part of the country that should remain for ever. Savings could be made on pay trains, as opposed to other systems. I am not opposed to considering the possibility of a bus service, provided there is a legal requirement on those who run the service—that is why I believe that it should be British Rail—to ensure that they will meet the timetable set by British Rail for the linking trains.
I want to make two points before I sit down about the options that were not rejected—except for one—by the Secretary of State. We talk about leaks. Where did that leak come from? Was it a leak from the right hon. Gentleman's Department, to the effect that he would remove at least one option? We get leaks every day from this Government. There is no point in complaining about leaks. This Government are the most leaky Government that we have ever had on every subject. Sometimes the leaks are right, sometimes they are wrong. The options not rejected by the Secretary of State would force more traffic on to already unsatisfactory bus systems. Certainly in the parts of East Anglia that I know the bus system is reducing, not expanding. The task, therefore, will be greater, and there might need to be a higher subsidy for buses if there were less financial support for rail.
My second point is that Norfolk is the fastest growing county in the country. It has one of the highest proportions of elderly retired people, and some of those who work there are among the lowest paid in the country. The growth of population in the county is taking place precisely in the areas that could be gravely damaged by rail closures. Rural life is already suffering seriously from closures of schools and pharmacies, with access to services greatly reduced. I do not believe that this or any other Government should

strike another blow at people who live in rural areas. People expect their Members of Parliament to speak out loud, as did the hon. Member for Christchurch and Lymington. In the winding-up speech, I hope that we shall hear, not just that the first option has been withdrawn, but that most of the options have been withdrawn, and that the Government will take a realistic view of the total transport needs of the nation, and not just a narrow view of the financing of railways.

Mr. Alex Pollock: I apologise to you, Mr. Deputy Speaker, and to the House for leaving the Chamber briefly during the debate. Unfortunately, I had just been given news of a train derailment in my constituency. At present, I have few details, but I am led to believe that one person has been killed, three are trapped, and several others injured. I hope that the House will join me in expressing sympathy to all those concerned. I hope, too, that my right hon. Friend can give me an assurance that we shall have a full and speedy inquiry into the circumstances, and that the findings will be made public.
In my general remarks, I shall concentrate mainly on the point of view of those who are concerned with the future of the rail network in the north-east of Scotland. I remind the House and the Government of how important a proper and adequate rail network is to the infrastructure in that area. There are perhaps some obvious examples. During the harsh winter months the railway can frequently be the only means of access to my constituency. On Monday of this week, during a comparatively mild winter, it was with great difficulty that the aircraft landed at Inverness, where I joined it to fly south to take part in the business of the House.
Last winter, when the weather was much more severe, I took my family to celebrate the new year in Glasgow. On our way home we got as far as Perth, where we were stranded because of the severity of the road conditions. Here I pay tribute to British Rail, because it went to a great deal of trouble to lay on a special train, not purely for my family, but for many stranded passengers in the same predicament. I should like to say how grateful we are to British Rail for what it can do in such circumstances.
Apart from the weather, there are other considerations that make the network so crucial to life in the north-east. For instance, I have no centres of higher education in my constituency. The nearest university is 80 miles away in Aberdeen. Therefore, many students make frequent and regular use of the network so that they can pursue their studies.
There are also two major RAF stations, Kinloss and Lossiemouth, in my constituency. They are manned by many thousands of service men, who in many cases come from different parts of the country. They frequently use the rail network to keep in touch with their families elsewhere. From the operational point of view, many of the parts and materials at RAF Lossiemouth are transported there by the rail network.
Therefore, the network is of considerable importance to the well-being of my constituents. It is also relevant in the delivery of materials for the whisky industry, another vital part of the community, which always gets a warm welcome across the party divide.
Over the years there has been a general acceptance by Government and public alike that, apart from purely


commercial considerations of profit and loss, British Rail must take account of the public service obligation, with an appropriate subsidy from the taxpayer. I hope that the Government will adhere to that approach, with its obvious socio-economic ingredients. However, that should not preclude us from exploring, as Serpell does, means of achieving greater efficiency and cost-effectiveness where possible.
One idea in the Serpell report was about manpower. It states that even a 1 per cent. reduction in the present wage bill would improve railway finances by about £14 million. Of course, to achieve substantial further reductions in manpower would need sensitive handling of industrial relations and would also involve major transitional costs in redundancy payments.
To the Government's credit, the Secretary of State for Transport has already made a specific allowance of £33 million for such costs in increasing the 1982 public service obligation grant and the external financing limit for 1982–83.

Mr. Donald Stewart: Does the hon. Gentleman agree that the Government should have another interest, which might be hidden at present? For example, during the war the Inverness to Kyle of Lochalsh railway was in constant use, taking materials across the north of Scotland from east to west.

Mr. Pollock: I understand the force of the right hon. Gentleman's historical point. No doubt, if he catches your eye, Mr. Speaker, he will develop that line of argument.
I am at pains to point out that Serpell wisely urges the Government to continue with their allowances scheme to assist the board in achieving the necessary manpower savings.
To summarise, the Government will hear from three main lobbyists. There are the sentimental railway buffs who will always try to keep the trains as they remember them from their boyhood days and for whom any change is a matter of regret. There are the many thousands whose jobs and employment prospects hinge directly on the Government's attitude to our railway network. However, perhaps the most important group to which the Government should listen are the regular and occasional users of the network whose best interests can surely be most fully realised by an intelligent use of manpower, equipment and resources.
Serpell wisely points the way ahead in suggesting many useful ideas. I invite the Government to pay attention to those rather than to some of the more alarmist and extreme noises with which the report has been received.

Mr. Ron Lewis: I am delighted to follow the hon. Member for Moray and Nairn (Mr. Pollock). I am sure that everyone will join him in expressing regret at the news of the disaster that he disclosed. I hope that it will not be as serious as expected.
As is the custom, I declare my interest. Before I was a Member of the House I was employed by British Rail. I am still an active member, I hope, of the National Union of Railwaymen. Therefore, that is my qualification for speaking on the report.
The Serpell committee has performed two useful public services. It has shed some light on the shadowy figures who exercise influence at the highest levels of

government, and it has provided us with a glimpse of the future that faces the nationalised industries and the whole public sector if, by some disaster, the Tories the next general election.
The report is the latest attempt by that band of fanatical opponents of the railways of which the Prime Minister, her economic adviser Professor Alan Walters and Mr. Alfred Sherman are the principal members, effectively to shut down the industry. They hate the industry because it is publicly owned. I hope that it always will be. The railway is in business primarily to provide a public service. I am glad to say that it is an industry that remains strongly trade unionised, which is very important.
The role of Professor Walters in this disastrous exercise requires explanation by the Secretary of State. Why? The reason is well known. It was he who halted the programme of main line electrification, approved and endorsed by a joint working party of British Rail and the Department of Transport.
It was Professor Walters who succeeded in getting Mr. Alfred Goldstein appointed to the Serpell committee. What part did he play in the handing out of the consultancy contract to R. Travers Morgan, the firm which, up to last week, had been paid £370,000 out of public funds for research which anyone with any knowledge of the railways realises was second rate and a complete waste of time? It has been put to me on good authority that Mr. Goldstein showed a copy of the report to Professor Waite well in advance of publication and was advised by him to write a minority report.
These are serious questions to which the Minister must reply. They provide yet more evidence of just how great a disaster the Serpell report has proved to be. Far from providing the basis for a new financial framework for the railways, which both the Secretary of State and Sir Peter Parker agree is urgently required, it provides a vision of what lies in wait for Britain should the Government remain in office for another term.
There are several reports in the press of the Minister having fallen out with Sir Peter Parker, who is the most conciliatory nationalised industry chairman one could hope to find. My hon. Friends and I have had cause to criticise Sir Peter for not standing up more to the Government on matters such as the assassination of the main line electrification programme and for acquiescing in the blatant asset-stripping that is taking place in the sale of British Transport Hotels.
The Government pushed Sir Peter into the front line during last year's ASLEF strike and made him do their dirty work for them while the Secretary of State watched silently from the touchline. So why are they now determined that Parker should go? It is because, far from shelving the Serpell report, they intend to brin3 it back after the election, should they get a majority. I hazard a guess that there will be a new chairman, a new Secretary of State—there is no doubt that the days of the right hon. Gentleman in that office are numbered—and, I suspect, a new British Railways Board. Then the Government will start to implement the Serpell report.
The absurd network options will mean savage fare increases for commuters, a reduction in safety standards, the destruction of British Rail Engineering Ltd. and the ending of British Rail's "Buy British" policy. If the Secretary of State had any intention of ensuring a future for British Rail, he would have dismissed the Serpell report out of hand and got down to discussing with Sir


Peter Parker and his board the investment proposals put forward in the 1981 rail policy document. Instead, in the House and on television, he refuses to rule out even the most absurd options.
With option A, for example, my constituency would retain one wayside station on the Euston to Glasgow line, with other connections to Carlisle closed. At least, I have some consolation. We are better off than major cities such as Sheffield, Derby, Leicester and Nottingham, which disappear entirely from the map.
The other so-called options remove one by one the lines serving Carlisle. In option C1, the least extreme, with no explanation from anyone, not even the Minister, the vital network link between Newcastle on the east coast and Carlisle on the north-west coast is closed. This line serves the constituencies of the Home Secretary and of the right hon. and learned Member for Hexham (Mr. Rippon), whose support on television for its retention I am pleased to acknowledge. I am told by British Rail that the deletion of the Carlisle to Newcastle line in option C1 is a mistake on the part of the consultants. Travers Morgan has so little knowledge of the railways that nothing will surprise me. The ratio of operating costs to revenue is certainly no worse for that line than for many provincial services which survive in other options.

Mr. Cowans: I am concerned lest my hon. Friend leaves the options. Does he realise that the commercial wizards who drew up the report have wiped out under option B the merry-go-round system that feeds all the power stations? How are the power stations to work?

Mr. Lewis: I agree with my hon. Friend. I hope the Minister will give him the reply that he expects.

Mr. Adley: Is the hon. Gentleman aware that, in its promotional literature, the firm is using the fact that it has done consultancy work on the railways for Her Majesty's Government?

Mr. Lewis: That makes it all the more deplorable that the Government should employ such a firm to do some of their work.
The Government's record on transport, and on railways in particular, is a disgrace. If the Secretary of State implements the Serpell report, it will be a disaster. The Serpell inquiry has been an expensive waste of time and a tragically missed opportunity. It could have provided the springboard for a new financial deal for the railways, a future which would benefit both passengers and freight customers, and restored the shattered morale of a willing and public-spirited work force by offering the prospect of security. It is difficult to imagine a better investment that we could make as a nation than the modernisation of our railway system.
In every debate on the Falkland Islands since April of last year we have heard the Prime Minister at the Dispatch Box and on television say that the wishes of the islanders were of paramount importance. I pray that she will apply the same criterion to those engaged in the railway industry.

Mr. Stephen Ross: I echo the words of the hon. Member for Carlisle (Mr. Lewis), whom I congratulate on an excellent speech. He showed courage and he seems to have much inside information, some of

which I had been told but some I did not know about. Like him, I regard Serpell as a tragically missed opportunity. As The Economist said in a recent article—I hope people still read The Economist—the Government and British Rail are back to square one.
We on the Liberal Benches—I have a colleague with me today—find it incredible that no international comparisons were pursued. British Rail would come out of such an investigation quite well, as the hon. Member for Christchurch and Lymington (Mr. Adley) has shown. I suppose that I should express some delight that the Isle of Wight at least appears on three of the options, although in very diverging situations.
The only reference to safety records appears in the Travers Morgan report in page 32 of the supplementary volume. In paragraph 4.06, a totally unfair and irrational statistic purports to show, in respect of employees, that lorries and buses are safer than trains. It is tragic that today there should have been a rail accident. I express my sorrow that it should have happened. However, the statistics show that the number of passengers killed in railway accidents in 1981 was seven. There were 69 deaths in movement and non-movement accidents which, I assume, apply to staff. There were no fewer than 379 suicides. One can only feel sorry for drivers when people throw themselves in front of trains. The total number of deaths therefore is 445, although it has to be remembered that passengers killed in accidents numbered only seven. Those seriously injured amounted to 407.
On the roads 5,846 people were killed and no fewer than 78,259 were seriously injured. Those are terrible and tragic statistics. These were people setting out on journeys in their cars. Yet their deaths seem to be viewed by the public as an everyday occurrence which does not matter a damn. I find the figures tragic and appalling. They must be taken into account when there is talk of putting more vehicles on the roads and even of replacing trains by coaches. I wish to point out how ridiculous is the Travers Morgan evidence. The only statistic on safety relates to the paragraph I have mentioned. How can the report be taken seriously?
Much of the criticism of British Rail is no doubt justified. However, no appreciation seems to have been shown of advances in technology—for example, high speed trains. Such trains require a higher standard of track. The technology exists in only four countries. Paragraph 3.24 on page 28 is hardly fair. It talks of making savings and using different types of steel. Not all the details are known about the track needed for high speed trains. This is still at an experimental stage. One wonders therefore how the report can arrive at such conclusions.
British Rail desperately needs new investment. Hon. Members may have seen the television programme about the Aberystwyth line where every third sleeper is rotten and which has so many slowing down places that every journey takes an hour or so longer than it should. There is also a desperate need for new investment in carriages on the Southampton and Portsmouth lines and on the west coast main line to Liverpool. This work would provide jobs that are desperately needed, not least in my constituency.
The first paragraph of Mr. Goldstein's minority report, on page 106, sums up his views. Railways, he virtually says, are an outmoded form of transport; let us write them off. That is a précis of his first paragraph. I am glad that the Secretary of State seems to reject that attitude. One


wonders, however, what would be in store under a new Conservative regime. I do not pretend that there is not a long way to go to improve productivity but of the target, set by the Secretary of State's predecessor, of 38,000 jobs to be lost between 1980 and 1985, some 24,000 redundancies, representing 60 per cent., have been achieved. The unions can claim to have gone a fair way down the path outlined in the House on 22 June 1981 by the right hon. Gentleman's predecessor. The unions could surely have expected a substantially greater commitment by the Government in response. Now, I believe, they are totally disillusioned.

Mr. Roger Moate: The hon. Gentleman has referred to a supposed statement by Mr. Goldstein in the minority report. I cannot find the words that the hon. Gentleman quoted. Will he give a precise reference to enable hon. Members to check the accuracy of the quotation?

Mr. Ross: I stated that I was giving a précis. I shall read out the paragraph, if I can be given time to find it. I am sorry, Mr. Speaker, to delay the House.

Mr. Speaker: It might be helpful if the hon. Member for Isle of Wight (Mr. Ross) wrote to the hon. Gentleman.

Mr. Ross: I shall find the paragraph for the hon. Gentleman and send it to him. I promise him that it is there.
Our opinion is that it is time that the Liberal party stated a clear policy setting out the role that we see for the railways and what the public should expect from them. Our party is not anti-railway, as many of the advisers of the Government appear to be. We want a good quality railway that is widely available at an affordable price. We believe that a successful railway should be as much an object of national pride as a successful army. I say "Hear, hear" to the hon. Member for Carlisle. God preserve us from the likes of Professor Walters, Alfred Sherman and Alfred Goldstein. We differ perhaps from the official Opposition in wanting a truly efficient railway. It will not do for the right hon. Member for Barrow-in-Furness (Mr. Booth) to bemoan continually the lack of investment in new equipment while his trade union friends refuse to accept an offer of £25 a week, or £5 a shift to drive new trains equipped for one-man operation. I hope that the tribunal finds a solution to that problem as quickly as possible.
We are faced with the prospect of the Conservative Party, if re-elected, dismantling our railways for doctrinaire reasons and the probability of the Labour party failing to persuade the unions to insist upon the necessary changes in working practices such as those advocated by Richard Hope in The Daily Telegraph today. I thank goodness that The Daily Telegraph has changed its leader writer from Alfred Sherman to Richard Hope. I commend the article to every hon. Member. Neither of these alternatives is attractive. Neither will secure the future of the railways. We would tell railway management clearly what we wanted—a thing that no Government have ever done.
We want hourly inter-city services serving main centres and two-hourly inter-city services to more distant centres. This would give an inter-city service broadly as it is now, but we would refrain from trying to make the service pass highly suspect tests of profitability. We want attractive

commuter services in major cities using as much automated equipment as possible. The network should be broadly as extensive as it is now. If services have to be withdrawn, good quality bus services should be substituted. They should not be services, as happened under Beeching, that are withdrawn after a couple of years. We want freight services organised to attract 40 million tonnes of traffic each year back from the roads. I believe this to be possible.
Much has been written—some of it appears on pages 61 and 62 of the Serpell report—on the case for subsidising the railways. If there is to be a railway, it is better that it should be well used. It is known that other modes of transport are subsidised in one way or another. The best line of reasoning we can adopt is not to argue about the merits or the amount of subsidy but to define what we expect in return for the subsidy.
In return for financial support, Liberals would expect the provision of a national transport network giving accessibility throughout the country, good quality commuting around cities with quality defined in terms of fares, frequency, reliability, punctuality and cleanliness, the attraction of appropriate heavy freight from the roads and gradual electrification to give the opportunity for exploiting alternative energy sources. We would want the railway supply industry to build an export base as high technology was developed and installed on our own railway system. We would also want to see a contribution to the tourist industry, one of the few growth industries that remain in this country.
We believe that the Government should support these clear roles for a national railway system. In return, we would require a positive response from management and unions in terms of greater efficiency and accountability. This would include more efficient manning of trains with one man in charge and the acceptance of other modern technology, streamlined administration, competitive tendering for rolling stock procurement, and co-operation with private enterprise and local communities. We have nothing against companies taking over, or trying to take over, lines from which British Rail wish to withdraw. There may be a case for greater co-operation with the Welsh Office and the Scottish Office, as has already happened over the Ayr line.
Our basic measure of progress is that we would expect each year to see increasing use made of the railways in terms of the numbers of passengers and tons of freight carried for each pound spent in subsidy. We must be able to show what the taxpayer is getting for his money and measure how it is increasing year by year.
I have outlined what I believe is a message of hope to railway users and staff. Let us have a good, well-used, popular and efficient railway run by managers who are accountable through the easily understood ratio of subsidy to usage. Let us have a railway open to fresh ideas and co-operation with private enterprise.
I am all for introducing private catering. I was listening to a lady on the radio this morning and I understand that private catering is being introduced on some trains, although it is very expensive to run. On some stations it has already happened. At Waterloo station, British Rail has done a marvellous job in improving the catering facilities. We must give credit where credit is due. Above all, let us have a railway to be proud of.
In answer to the hon. Member for Faversham (Mr. Moate), may I point out that in paragraph 3.01, on page 106, Mr. Goldstein states:
Railways are a means of transport. Though each form of transport has throughout history created cultural and social change—and railways particularly so—each has been overtaken, in some or all aspects by successors. The attachment many of us have for the present railway is not reflected in the fares we are prepared to pay, since these fares do not reflect the full cost.
In other words, he is saying they are past their day. That is how I read it. If he is not saying that, I apologise.

Sir David Price: In the interests of brevity, the hon. Member for Isle of Wight (Mr. Ross) will forgive me if I do not comment on the outlines of his Liberal transport railway policy. It contains all the platitudes in the book.
I have three personal reasons for seeking to attract the attention of the House. First, most hon. Members know that I have a strong constituency interest in the future of our railway system. Secondly, I am a member of the Select Committee on Transport. Thirdly, I have a personal commitment to the railway system; I travel by train by choice. "No names, no pack drill", but I am not one of those hon. Members who comes to the House to plead that his branch line must remain open, but who never uses it himself and travels by foreign car all the time.
The points that I shall make will be abbreviated. I shall not develop them, although all my points could be developed were we not under a tight timetable.
I interrupted the right hon. Member for Barrow-in-Furness (Mr. Booth) when he referred to the narrowness of the Serpell committee's terms of reference. I pointed out what seemed to be key words in the terms of reference. In my judgment, they enabled Sir David Serpell and his colleagues to go as wide as they wished and to cover many of the points that have come up during the course of this debate.
The right hon. Member for Barrow-in-Furness and most of the commentators on the Serpell report have started at the wrong end. In any service one must start with the customer—no customers, no railways. I agree strongly with the criticism of British Rail which appears in its paper "The initial response by the British Railways Board". It says on page 13:
Our preoccupation in this increasingly competitive industry is with our customers. Some of the options outlined in the Reports for cost reductions would, in our view, impact adversely on service standards by reducing quality; consequently they would reduce revenue. The majority acknowledged this but failed to quantify the likely consequences. This is a serious omission".
Last year the Select Committee examined the London commuter area. I should like to quote a passage in our report. We had been taking evidence from British Rail. The report states:
British Rail gave us a graphic and familiar description of the effects of age and under-investment on their London and South East commuter services. There had, they said, been 'consistent under-investment in physical facilities and the inability to make proper provision for the future. This has resulted in a lowering of standards and a reduction in the quality of service provided. Rolling stock has not been replaced or refurbished when required; speed restrictions have had to be imposed; reliability and punctuality have deteriorated. At present, the level of investment is barely sufficient to maintain existing standards, let alone provide for the improvements in quality which are essential

to ensure an attractive and efficient transport system, consistent with the importance of London as an international financial and commercial centre, and to safeguard its development potential for industry'.
I could detain the House longer and read a great deal more. Everything is there in our report. Those of us whose main experience of British Rail is the southern region would agree with some lines of John Ruskin, who said over 100 years ago:
Going by railroad I do not consider is travelling.… it is merely being 'sent' to a place and very little different from being a parcel.
The only similar reference that Sir David Serpell makes in his report is in paragraph 6.19, where he said:
We … consider that the state of many of the Board's stations must be a deterrent to travellers.
He can say that again.
The second great omission is that Sir David has not referred to the staff of the railway. Here I defend Mr. Goldstein. He reported enthusiastically about the dedication of the staff. He said:
I am struck by the dedication that our engineering consultants found so impressive among railway staff'.
I hope that, coming from Eastleigh, I am not being too subjective when I say that there are many dedicated and conscientious railwaymen who are still proud of being on the railways. The management system down the line—and I mean literally down the line—is such that I do not believe that they are getting the direct personal leadership to which they are entitled. I have simple and old-fashioned views about leadership.
Sir Peter Parker has done an admirable job at the top. Nor do I blame individual managers. I believe that the problem lies in the system. We saw evidence of that during the long dispute over manning and rostering. It was not only about money. It also had something to do with the whole management system by which rosters were worked out when manning changes were made. One of the rights of man is the right to have a boss and not an impersonal system, and least of all to be run by a computer. We must pursue the area of human relations much further if we want to recast our railway system and make it more efficient.
Mr. Goldstein had a lot to say about and was highly critical of the current management structure in British Rail. I commend to the House what he said in paragraph 4 29:
In my opinion, this structure of management is a sure recipe for uncertainty, low morale and less efficiency. In the short term the arrangement may have some galvanic effect as all changes are prone to. In the longer term, it simply will not work".
He went on to say:
I believe therefore that a more unified direct and clear command structure needs to be the target".
Most of us who have experience of management in diverse occupations would agree with that principle. It is essential, whatever size the railway system becomes, that management should be recast so that there is a direct command structure.
Standards, safety and maintenance have already been mentioned. It is a subject that must be dealt with in more detail. It appears to me that the report criticises British Rail for giving too much attention to its standards of safety and maintenance. It suggests that it is not cost-effective. The cost of safety and maintenance cannot be fine-tuned financially. The performance must be fine-tuned. That gets back to the question of morale. It depends on the conscientiousness of the people carrying out the normal routines, inspections and drills. Once one lets standards


slip, they go. One cannot aim too high. To me the list is the only thing that is acceptable. I speak as an old Guardsman.
I hope that the Select Committee will probe chapter 8 of the Serpell report and the high investment option H. Whatever arguments there may be about the current subsidy, unless more money is put into the infrastructure of British Rail, we shall have a continually deteriorating rail system. That was not the conclusion to which Sir David Serpell came in chapter 8, and I believe that he is wrong. Paragraph 14.20 states:
As evaluated, therefore, the High Investment Option would not show a satisfactory financial return.
It may not do that on his figures, but would it not produce a good railway system?
The key question is whether the railways can be made to pay: If they cannot, what railway system should we sustain and how much and how should we pay for it? The first question has slightly confused the consideration of the second, because it is a total dream to believe that in modern conditions a railway system of any size can be completely self-financing. To come to Mr. Goldstein's defence, that point came out clearly in his minority report. He made it much more clear than did Sir David Serpell and his colleagues in the majority report.
Finally, I draw the House's attention to the two options. Mr. Goldstein said:
For the present railway system a keen pursuit of efficiency measures is unlikely to result in an annual passenger deficit of less than £800 million—£900 million in the long term … Investment levels would need to be significantly higher than today. In the short term, up to 1986, there is in my view little or no likelihood of the PSO requirement being contained to within the 1975 levels … in real terms.
The majority report says that it could be maintained within those levels.
The Select Committee will investigate the matters in greater detail. Sir David Serpell, Mr. Goldstein, my right hon. Friend the Secretary of State and British Rail will give evidence to the Committee, and we hope to probe the question how the railway system can be paid for.
Those are a few preliminary observations to the House by way of prologue to what will be the continuing drama of the future of our railway system. I trust that that drama will not lapse into either tragedy or comedy.

Mr. John Morris: More than 15 years ago I chaired an inquiry into the finances and the management of British Rail. Many of the problems remain the same. That inquiry had an eminent membership—a future secretary to the Cabinet, a future Comptroller and Auditor General and a future chairman of the Port of London Authority, to name but a few. It laboured long and hard for more than a year. Its report was accepted on all sides and formed the basis of a comparatively non-controversial part of the Transport Act 1968, which should please my hon. Friend the Member for Nuneaton (Mr. Huckfield), who worked hard on the Committee on that legislation, and included the creation of grants for socially necessary lines.
How very different is the reception to the Serpell report. It has no friends. A fundamental difference between my joint steering group and this report is that ours was a tripartite effort of independents, of British Rail, and of the Government. The methods of this report are challenged, its premises are suspect, and it is a botched-up job done

in a hurry. I am amazed that any consultants worthy of the name should allow their findings to be published in the way that they have. The impression that one gains far too frequently is of a gossip column of titbits and a catalogue of suggestions emanating from the bars of golf clubs in the home counties with seldom an iota of evidence to back them.
One example is that British Rail is critised for usually renewing tracks on Sundays. The report askes why it does not do that on other days. When last did members of the committee travel any great distance on a Sunday? Do they wish to transfer the discomfort and delays of Sunday travel to other days? How many passengers and customers would be lost? In contrast to the investigation of the Monopolies and Mergers Commission, the consultants did not take up the offer to talk to senior engineers at British Rail before they finalised their comments. No wonder that the only undisputed savings that are foreseen are the £150 million offered by British Rail.
British Rail accuses the consultants of double counting or, worse, assuming as safe bankers, mere expectations! I have always understood that the essence of good consultancy is to try to carry the investigated party with one on the facts. The serious flaw of this report is that so much is factually disputed.
I mention three major personalities. Mr. Goldstein's manner of operating is very strange. His report contained fundamental differences, but he waited until only 11 days before the finalising of the major report before telling his colleagues that he would dissent. That is extraordinary. Given the strictures of Sir David Serpell, I wonder whether he was worth his corn as a member of the board of British Rail since 1974. What on earth was he doing before that as permanent secretary at the Ministry of Transport and the Department of the Environment? Sir Peter Parker has done a great deal for the railways. Before the recession in 1980, passenger miles had returned to about the level at which they were before the Beeching cuts, when there were only half as many cars on the road.
However, the Secretary of State must carry the sole responsibility for the terms of reference of the inquiry and the way in which they have been interpreted in the majority and minority reports. The members of the committee differed among themselves. It may be that the time provided—a mere six months, extended by one month—is the cause of that narrow and restrictive interpretation.
Rail finance cannot usefully be discussed without a clear idea of the railway system that we need. That cannot be done without an idea of the correct relationship between rail and other forms of transport and the wider public interest. It is no good the inquiry advocating substantially higher fares for the south-east and being shrinking violets by declining to consider the probability of road congestion and other social costs. We have had inquiries and options by the bucketful during the years and, from time to time, British Rail has put plans and proposals to the Department of Transport. Decisions are required now. Given the period of 20 years contemplated by the committee, it should have answered the question about the railway system that we want and how it is to fit in with the rest of the transport system.
Both reports are clear that, short of the extreme option of a 1,600-mile system, no system will pay. No railway of significance in the world is paying its way. Our subsidies are half what the Germans pay and one-third of what the French pay. Yet the French are pumping more


investment into their railways. If we do not recognise that need, by the process of non-decision-making, the railways will fold up by themselves.
The committee, on the advice of its whiz kids, belittles British Rail's claim that there is an 800-mile backlog in track maintenance. Its members blithely suggest the lowering of safety standards. I am sorry about the news we have had of the crash, or whatever it may be, in Scotland. I assure the Minister that it needs only a couple of major rail crashes and he will be coming down to the House wringing his hands, especially if it is found that any slowing down of maintenance is the cause of a crash. Of course it is right to challenge, and to do so ruthlessly, any cosiness on the part of BR in continuing existing practices, but the convictions of the inquisitors are not necessarily translatable into actual savings.
When we made our report in 1967—and many of the problems remain exactly the same—our aim was to eliminate all unfair burdens from British Rail so that it could operate commercially for the rest of its remit. We were far too optimistic, even though we rejected the even more optimistic British Rail. The truth is that British Rail has been, and continues to be, too optimistic. In this report we find that only the worst option of all could conceivably pay—an option that would be for Wales, for most of Scotland and for a good part of England the "zero option". That is what we would reject.
Even the calculations of the 1,600-mile option are dubious, relying as they do on freight profits; yet its truncated network does not carry any of British Rail's profitable freight routes.
What is sadly lacking in this report is any mention of the importance of the men and women of every grade who run the railways. This is particularly manifest in the main report. Over the years there has been a dramatic fall in manpower. As we have been told, a 1 per cent. fall in the labour force improves British Rail's finances to the tune of £40 million. It is this history of falling manpower that makes the unions extremely sensitive and suspicious. It is imperative in every labour-intensive industry to make a substantial effort to carry the labour force with one. Not only is the work force entitled to participate in the determination of its own future, but it is at least prudent of every sensible management to see that it does. I shall give one example.
There is nothing new in the failure to use new and expensive equipment in British Rail. Mr. Marples, as he then was, agreed to considerable investment in liner trains. When we came into office they were lying idle. Nothing happened until my Minister and I, unaccompanied by any officials, went to the headquarters of the National Union of Railwaymen to meet its executive. It took three days of solid talking to get an agreement. It must never be forgotten that the basic need in any industry that has seen the contraction of its labour force over the years is to remove suspicion. That was what was needed then—nothing more, nothing less. From that moment on, the expensive system that had not been used has expanded and developed.
I suggest that it would be both wrong and politically unacceptable to reduce the railways to the level of most of the options that are paraded before us. On the other hand, I would not defend the status quo without being convinced that it was the right size and in the nation's

interest. The crux of the financial problem is the £500 million that goes to subsidise the provincial network. The truth is that Beeching's cuts achieved only very modest savings. He cut off the ends but forgot where the major losses took place, and that was in wagon-loaded traffic. Someone else had to tackle that.
If there is no significant investment in the industry, I foresee very little co-operation. If there is worthwhile investment, say, in electrification, then it might be easier to consider economies elsewhere. It would be a tragedy if the totality of the global loss drove out consideration of necessary new investment in the railways. For example, payments are made under the Transport Act 1968 for the grant-aiding of new sidings to couple industries with the railways. Much more needs to be done.
The House may recall that one of the casualties of the 1968 Bill was the removal of the clauses dealing with abnormal loads. The social costs which we now pay in the cars and lorries which are held up by those loads are colossal. Yet the senders of abnormal loads not only do not pay a penny for the privilege of cluttering up our roads, but do not even have to pay the cost of their police escorts.
If we are to have a significant railway system, run on a subsidy, then its role must be judged as part of the whole transport system and there should be a positive determination to shift more freight from road to rail. For some there is no alternative to rail. I took part professionally in an inquiry, during the course of which it was revealed that the alterative bus service offered passed over a weight-restricted bridge which was strong enough for the bus to go over provided it had no passengers. I am glad that that railway line in north Wales is open to this day.
A report that has been described by an eminent economist, now on the railways board, as pure poetry—the sort of doggerel found in elementary exercise books—must of necessity be questioned. I warn the Minister to reject this politically explosive package. If he does not, it will be done for him by his Back Benchers, as we have heard today. I had the painful task of closing hundreds of miles of railway and the most vehement opposition came from the Tory Back Benchers whose constituencies were affected. I cruelly reminded them individually at Question Time, because I carried the Division lists in my pocket, and when they came on delegations, that their names were marked as supporters of the Beeching report when it was debated in the House.
It will not do for the Minister to do a Ravenscraig on the railways—to defer the evil day until after the election. The electors will want to know what savage cuts he has in mind for the rural branch lines, what fare increases commuters can expect, what new safety standards are contemplated, and, despite the Prime Minister mouthing her slogan to "Buy British", how much will be left of the locomotive works if we import.
Many good questions have been asked in this report, but they are not the right ones. I invite the Minister to go back to the drawing board.

Mr. Roger Moate: We owe a debt of gratitude to the right hon. and learned Member for Aberavon (Mr. Morris). I was going to accuse the Opposition of having added total amnesia to their myopia in dealing with the Serpell report but the right hon. and learned Gentleman has now reminded us—something I


was going to do—of the extensive closures for which the Labour Government, of whom he was a member, were responsible from 1965 to 1970. One would have thought from the debate we have been having that railway line closures were a prerogative of Conservative Governments and something in which Labour Governments had never indulged. The period of Government to which the right hon. and learned Member for Aberavon has just referred was a period in which the Labour Government closed not just a few miles of branch lines, not just the hundreds of miles to which he referred, but over 4,000 miles of line. They preach to the nation that they are opposed to all closures, but hon. Members should recall that they closed 4,219 miles of line.

Mr. Les Huckfield: No.

Mr. Moate: I did not quote that figure from memory. I can assure the hon. Gentleman that that is true. In recent years this Government have consistently supported broadly the size of the railway network as it exists today. Hon. Members should look at the record before launching into too many diatribes or flights of fancy.
Let us get the facts straight. Previous Governments have carried out closures. In recent years, this Government have supported the size of the railways and the level of finance necessary to sustain the present network. They have maintained the levels of support that the previous Government maintained. We can be proud of that record.

Mr. Alexander W. Lyon: The hon. Gentleman must be joking. If the level of Government support has been sufficient to keep the network going, why is it falling to bits? I agree that the Government have maintained the public service obligation at roughly the same level, but overall they have cut the amount of help given to British Rail and the amount of money that British Rail could invest to a level that is well below that required to keep the network going.

Mr. Moate: The hon. Gentleman should get his facts straight. It is on record that the total level of financial support given to British Rail, including investment and the PSO grant, is as high in real terms as it was under the Labour Government.

Mr. Cook: rose—

Mr. Moate: If it so happens that more of that support has gone into current subsidies and that nearly £100 million has been wasted through strikes and industrial action that have been supported by the Labour Front Bench, that should be laid not at this Government's door but at the door of others. However, the total level of financial support has been maintained.

Mr. Cook: rose—

Mr. Moate: I must continue, because other hon. Members wish to speak. If the hon. Gentleman wishes to speak later, I hope he may do so.
Investment may well have dropped and we regret that, but the total level of financial support has been maintained and it is up to British Rail, the management and the unions to answer for how the money is dispensed.
There is another myth to dispose of, although it is difficult to do so when the facts are so often distorted. The myth is that Serpell's principal recommendations consist of major cuts and of fare increases for passengers. That is just not true. It is most unfortunate, to say the least, that

responsible Members of Parliament should have indulged in such grotesque distortions. Let us put the facts on the record and consider Serpell's principal conclusion. He reached simple conclusions. The report is long and there is a series of options and maps. However, page 85 contains just five short paragraphs giving clear conclusions. Paragraph 2 states:
We see many opportunities to improve the efficiency, and reduce the costs, of the railway while keeping it at broadly its present size.
Will any hon. Member dispute that there are opportunities to improve efficiency and to reduce costs? I trust not.
The report continues:
If they are seized with the necessary determination, the level of grant required in 1986"—
I shall leave out certain bits, but it is all on the record—
could, we believe, be lower in real terms than the level Ministers considered appropriate between 1975 and 1980.
The paragraph is too long for me to quote in full, but it will require transitional costs, which could be substantial. The report urges the Government to help to meet those costs and thus calls for more investment in order to maintain the network at broadly its present size. That is the conclusion, although one would not think so judging from the distorted extracts that Labour Members have given us. [Interruption.] The report continues:
In the longer term, we see yet further possibilities for improvements in efficiency and for cost reduction, particularly in the engineering function.
If the travelling public read that they will not recognise it as the report that has been referred to by Opposition Members. In order to put Serpell in context, I shall quote another important paragraph. It states:
Our function, in the 7 months available to us"—
many people might say that that was too short a time and it is to the credit of those involved that they carried out a major report in such a short time—
has been to mark out opportunities and options, not to develop them in detail. We hope that our work will provide the Secretary of State with the foundation on which he can decide future policy for the railway and that it will provide the Board with the material on which they can take early action to improve their finances.
It is the task of Ministers and of Parliament to decide policies. Serpell analysed the situation and gave us options on which we could take decisions.

Mr. Robert Hughes: The hon. Gentleman should quote paragraph 4, which states:
It is clear to us that reductions in the size of the network will be required if the level of financial support for the railway is to be lowered substantially.
If the hon. Gentleman quotes conclusions, he should quote them all, and not be selective.

Mr. Moate: The hon. Gentleman has made a much fairer point than other hon. Members have made. The report states:
if the level of financial support for the railway is to be lowered substantially.
Where is it stated that it is any party's policy to reduce the amount of financial support given to the railways? Time and again Serpell makes it glaringly clear that the politicians must decide. If we decide on a lower level of support, it suggests that we cannot maintain the present network. I should have thought hon. Members would welcome Serpell's analysis.
Let us take the first option. By stating clearly that there is no prospect of a commercially viable railway—other than on a very small network—Serpell has made it clear


to us all, including those who hanker after a profitable let alone a viable railway, that it is not a politically realistic proposition.

Mrs. Kellett-Bowman: It is made absolutely clear on page 85 that if the savings and efficiency improvements are made, and the electrification that has already been paid for is taken advantage of, the PSO grant need be no higher in real terms in 1992 than at present.

Mr. Moate: It is important to put Serpell into the context of current thinking and policies. The Government have consistently said that broadly they want to maintain the network. That has been their consistent policy and there is no suggestion that we intend to make great cuts in the financial support given to the railways. That being so, Serpell helps us to look for areas of greater efficiency, management savings and cost reductions to ensure that the passenger and the taxpayer get a fairer deal.

Mr. Anderson: rose—

Mr. Moate: It would be unfair to the House if I gave way. I hope that the hon. Gentleman will forgive me, but I do not want to speak for too long.
I should like to lay or tackle another myth. I refer to the idea that Serpell suggests 40 per cent. increases in fares. I can understand those dedicated believers in the railways who think that anyone who ventures a criticism is doing the railways a disservice. Sometimes they distort the facts and try to scare the public. However, we should get the facts straight. There is no mention in the Serpell report of a 40 per cent. increase. The way in which the question of season ticket discounts is dealt with shows that the report recognises that it is simply something that should be considered. It states that it should be reviewed.

Mr. David Crouch: I must intervene because I live in my hon. Friend's constituency and I use the railway line that he sometimes uses. In paragraph 2.22, Serpell does not talk about a 40 per cent. increase in fares in London and the south-east—he says something much more frightening. We are criticising not the Government, but the report. Serpell said:
There is also the option of a substantial real increase in L&amp;SE fares generally. This is the only sector of the passenger business where such an increase would be likely to improve the financial results significantly within the next two years.
That is enough to make anybody pick up a pen and write an article about increased fares.

Mr. Moate: My hon. Friend and I have fought long and hard for commuter interests. The Government, British Rail and hon. Members representing constituencies in the south-east have made considerable efforts to keep down rail price fares roughly to the level of inflation. In past Select Committee reports, statements by Sir Peter Parker show that we are threatened with real increases in fares in the coming years, with or without Serpell. That is part of the problem that we face.
The much maligned minority report by Mr. Goldstein makes it clear that any major increase in season ticket costs would have severe effects upon road congestion, and should be subject to fundamental review. Are we, as a House or a nation, scared of even examining those fundamental concepts? We should take the report as it is—a helpful contribution to a railway debate.
Hon. Members who have rejected, abused and dismissed the report, even before reading it, do a disservice to themselves, the railways and, certainly, the taxpayer if they do not respond intelligently to it. It is a helpful report in the sense that it is our duty to ensure that the nearly £1 billion of taxpayers money is well spent.
We could all speak at length about the extensive report, but I shall be brief and conclude with two points, which any hon. Member is welcome to answer in his contribution. Should we proceed with major new investment decisions until the Bedford-St. Pancras line manning agreements are resolved? Is it right for the taxpayers that, while £150 million of new equipment is standing idle, they should be asked to pay more money?
Will someone comment on the simple point made in the report that the much quoted Leamington Spa to Stratford-upon-Avon line had a revenue of £76,000 in 1981, but that its direct costs alone were £420,000? Is that right? Politicians may decide for social reasons that it is right to keep such lines open, but it is equally right that the facts should be exposed and answered and that all such expenditure be justified.
The Government's record in supporting the railways is outstandingly good. The passenger and taxpayer need have nothing to fear if we openly and sensibly analyse the Serpell report and use it to make sensible decisions about the future of the railways. I strongly believe in a modern and efficient railway, and Serpell will help us to achieve it.

Mr. Walter Johnson: To digress for a moment, Mr. Speaker, I understand that you were elected to your present office seven years ago, on 3 February. I am sure that the whole House will wish me to congratulate you. [HON. MEMBERS: "Hear, hear."] You have retained the confidence and affection of us all.

Mr. Speaker: I hope that the House will forgive me if I say that I have enjoyed that part of the debate best of all.

Mr. Johnson: In those circumstances, Sir, perhaps I should sit down.
As was said earlier, there have been many reports on British Rail. My right hon. Friend the Member for Barrow-in-Furness (Mr. Booth) recalled some of them. As many hon. Members know, I have been concerned with the railways for a long time. I have never known any report to be so universally condemned. It has been a waste of time and money. I understand that it has cost more than £600,000—and all the bills have not yet been received.
There is a series of options in the so-called report or review, but no recommendations or proposals. Those of us who have worked in the industry could have given the Secretary of State all those options, and he need not have referred to Serpell. The report has been a serious embarrassment to the Secretary of State and the Government because of its various options. For example, if the Government accepted just one of the options, and there were massive increases in passenger fares—especially in the commuter belt—those living in and around London would be outraged. At the last general election, the Conservative party won almost every marginal seat in the London commuter belt. That would not be the case if the Government took up an option that


increased fares dramatically—it would probably double them. Conservative Members would say something positive to the Secretary of State if he tried to implement such an option.
I charge the Secretary of State with questionable conduct in calling for a report that raises bogies in the form of outrageous and unacceptable options—especially those related to network size—which, after much huffing and puffing, he virtuously declares to be unacceptable. If the Government are serious about retaining the network at broadly its present size, why ask for an examination of the options for decimating the railways? The report provides a further excuse for not taking the positive, favourable decisions on railway finance and investment that are desperately required.
The report fails to discuss, let alone comment on, electrification, foreign railway comparisons and the Channel tunnel. Chapter 2 is devoted to passenger business, and an important section deals with inter-city business. The report may say that electrification cannot possibly affect the prospects of viability or otherwise before 1985, but it looks further ahead to 1992, and its brief comments for that period fail to take into account electrification—as does the examination of option H, the high investment option which considers whether a high level of investment would affect the financial results. Chapter 3 deals with freight, but does not even mention the Channel tunnel. That factor must be taken into account in the long run, especially if we are looking for economic hauls.
Too many reports about the future of the railways are circulating. They tend only to confuse. They do not help the business man planning his freight transport requirements. Worse still, one report cattily criticises the other. That is evident in Serpell's criticism of the British Railways Board's October 1982 rail plan. I understand that Sir David Serpell was a member of the board at that time, which makes it even worse.

Mr. Cook: Sir David wrote it.

Mr. Johnson: I had forgotten that. We need ministerial reassurance about the future of the industry and the necessary financing to consolidate existing services and to modernise for the future.
The Serpell report, as with many others in the past, makes the mistake of glibly accepting that cutting costs on the railways will be easy. There is little in the report to pinpoint where economies can be made. There is scant acknowledgement of the reduced costs and improved productivity that have been achieved already through the co-operation of the trade unions. I speak as a former president of the Transport Salaried Staffs Association. I challenge anyone in the House to say that my union and its members have failed to deliver the goods. In the past two years, 25,000 people have left the service of British Rail.
The Serpell report is more notable for its omissions than for anything else. The report accepts the case for subsidy to rail in London on the ground of road traffic congestion, but it does not take fully into account the wider benefits to the economy and the structure of London. Nor does it seem to accept the case for subsidy in other large conurbations where local passenger transport executives are showing their faith in rail's advanages in the urban environment. The Serpell committee seems satisfied to

state that road vehicles pay more in tax than their direct cost to the public purse. That is nonsense. For instance, heavy lorries do not pay their full cost to the public purse, and the cost to the Exchequer of the company car tax loophole is more than twice the subsidy to British Rail.
In its discussion of the energy efficiency of different types of transport, the committee fails to point out the key issue of the inherent energy flexibility of electric railways. The railways provide an insurance against long-term energy shortages.
In the absence of subsidised public transport, many groups of workers would be deprived of access to social life brought about by mobility. Many have low mobility for social, economic or geographical reasons. In this area the Government will be heavily criticised if they adopt any of the options included in the report.
I should like to say a few words about the British Rail Engineering Ltd. workshops. I have two such workshops in my constituency. The report does not criticise at all the quality of BREL management or its performance. Instead, it criticises the ownership of BREL. It is hoped that this part of the report will not be used by the Minister and his colleagues to further their prejudices against publicly owned industry. Relationships between the British Railways Board and BREL are being geared to competitive tendering. Among the steps taken to develop this relationship is the competitive tendering currently under way between Metro-Cammell and BREL for prototype diesel multiple units and detailed examination of the contractual arrangements between BREL and the railway.
The board sees the development of that relationship as being the best policy to pursue because by doing so the board maintains control of maintenance and supply. In addition, it allows the development of railway exports backed by the know-how of British Rail. The board favours this approach because it says that it can achieve all that the Serpell review advocates without a change in ownership. The achievement of BREL management in recent years—the reduction, for example, of 5,000 wages grade staff in 1981–82, the reduction in surplus capacity costs of £4 million in 1982 and reductions of stocks of spares by £25 million in 1981–82—surely suggests that the arm's length relationship will be a success.
If the Government would agree to further investment for the railway workshops they could work at full capacity and there would be no need to close any of the workshops. There is a great need for new rolling stock. Much of the existing stock is clapped out. There is also a great need for new locomotives. All this work could be done in existing railway workshops. We have heard today of EREL's success in obtaining an overseas order. Many of these options can be taken up if the Government are prepared to invest in the way I have suggested.
The Serpell report is damaging. It does nothing to help the railways. I hope that when the House divides tonight Conservative Members will agree to come into the right lobby because they know that implementation of the report would seriously damage to their prospects at the next general election.

Dr. Brian Mawhinney: I do not pretend to have the detailed knowledge of the industry of the hon. Member for Derby, South (Mr. Johnson). I should like to start by declaring an interest. First, I represent a


famous railway town. Secondly, I have a considerable number of commuters in my constituency. Although Peterborough is 85 miles from London, more than 500 of my constituents commute daily to London. Thirdly, I wish to acknowledge, as did my hon. Friend the Member for Eastleigh (Sir D. Price), a personal commitment to the railways—one shared by my right hon. and hon. Friends on the Front Bench.
That commitment is shared by most of my constituents. They want a railway service. They want a good railway service. When they complain to me they do not complain about the existence of the service but about the fact that it is not up to the standard they expect it to reach. In other words, they are saying what Serpell is saying. They want better service, they want a higher quality and more efficiency. But equally they want the rail network to be maintained roughly at its present level which, as my hon. Friend the Member for Faversham (Mr. Moate) said, is Government policy.
My constituents would be surprised to learn that the taxpayer is now contributing slightly more to the cost of railway journeys than is the farepayer. They would also be surprised to be reminded that the Exchequer is contributing almost £1 billion to the railway industry this year.
In the first of my two comments about the report I wish to concentrate, as did my hon. Friend the Member for Eastleigh, on the customer. The customer is not getting value for money out of the service at the moment. There is little in the Serpell report that looks at things from the customers' point of view. The customers' perception of the railways is not a particularly good one. They remember last year's strikes and the amount of money that that cost the railway system. They did not hear at that time anyone being seriously concerned about the customer. People were concerned about the politics of the strike and about the impression that was created that the railways were there primarily to provide jobs rather than a public service. They were "turned off' by this.
Secondly, people are unhappy about their perception of the railways, which they see as a political football, suffering from rigid management structures—although I, too, should like to pay tribute to Sir Peter Parker, and the improvements that have been instituted under his management. People see archaic work practices and overmanning still in the industry.
One of the advantages of being in a railway town is that the people who work on the railways talk to their neighbours. Their neighbours are still upset that railway drivers are working, in some cases three-and-a-half hours out of an eight-hour shift. They believe that more can be done in that regard.

Mr. Huckfield: That is arrant nonsense.

Dr. Mawhinney: It is not nonsense.

Mrs. Dunwoody: When people talk to the hon. Gentleman about consultants or about scientists working within the National Health Service on the basis of evidence gathered from their neighbours, does he regard that as reliable and informed comment or gossip?

Dr. Mawhinney: As the hon. Lady well knows, in some cases it is the former and in some cases it is the latter, as is true in this case. I said that one of the advantages of

representing a railway town is that one gets the views of those who work on the railways, first hand. They are my constituents. They talk to me. As the hon. Lady may know, I have good relations with the people who work on the railways in Peterborough. I have met the executives of the branches of both ASLEF and the NUR.
I shall now say something of which the hon. Lady will approve, but I say it because I believe it. The Serpell report does not deal with the frustration that is building up among workers in the railway industry who have met the criteria laid down by management but who are still not receiving the benefit of achieving them because some of their colleagues and union leaders are not willing to move as quickly as, for example, some of my constituents have already done.
Serpell notes that the industry has shed 250,000 workers in the past 20 years and that is to be commended. In addition, as we have been reminded, 25,000 workers have gone in the last two years. I should like to underline Serpell's encouragement to the Government that more money, in a transitory sense, should be made available in order to continue that process. The railway industry has in it men who have worked all their lives and who would be willing to retire early with appropriate help from Government funds so that we could build a railway system for the future on the young men in the industry to whom we shall have to turn
The customers see a service which in their view is sometimes run for the benefit of British Rail rather than for the benefit of the traveller. A distinguished constituent of mine telephoned me this morning—the leader of the Peterborough city council, who is well known to Labour Members and the Under-Secretary of State. He telephoned me as a constituent, not as the leader of the council. Last night a 125 train broke down at St. Neots and the passengers were left to sit on it with no information for 50 minutes. Mr. Swift arrived driving a lightweight engine and towed the train to Biggleswade, where it was left sitting for another 50 minutes and again the passengers were given no information. Nobody would stop a through train to take them off and nobody gave them information. All that was for the convenience of British Rail, that it might get another driver from London to take over the disabled 125 engine. Given such an example, about which an ASLEF member of 39 years' standing and a senior Labour politician was so angry that he rang me at home at breakfast time this morning to ask me to raise the matter in the House, it is no wonder that the customer is fed up with the type of service that is being offered to him and is demanding a more efficient, cost-effective service of a higher quality than is presently available.
One paragraph in the Serpell report dismisses electrification. That is not acceptable and on that I agree with the hon. Member for Derby, South. There is only one negative paragraph about electrification. The House knows that I have consistently urged on the Government the need to electrify the east coast main line from London to the north. The Government set demanding conditions for that which were clearly explained to the House in June 1981 by my right hon. Friend who was then Secretary of State for Transport and who is now the Secretary of State for Social Services.
Among other things, the Secretary of State for Transport said that the Government would be willing to be committed to supporting a programme of electrification provided that the board could show that the inter-city and


freight business sectors could be made viable by 1985; prove that the routes to be electrified were potentially profitable; show that investment in electrification of each project within the network of routes to be electrified would produce at least seven per cent. return taking into account any network effects; and provide convincing evidence of progress towards reducing staff numbers towards the target of 38,000 fewer by the end of 1985. After two years, staff numbers have been reduced by 25,000.
The House knows that since June 1981 much additional work has been undertaken by British Rail within the stringent guidelines which, quite properly, my right hon. Friend the Secretary of State for Transport set forth. A measure of that work can be seen in that inter-city and freight sectors were redefined and prospectuses prepared that met the agreed criteria, and those were sent to my right hon. Friend in January 1982. Route profitability assessments were completed, which disclosed that all the routes selected for inclusion in the 10 year programme passed the tests devised by my right hon. Friend. Those convincing prospectuses were sent to the Secretary of State a year ago but events and forecasts have changed, particularly in respect of traffic volumes. The board is now producing a new set of proposals and it tells me that it hopes to send that to my right hon. Friend in about four weeks' time. It is confident that they will meet the criteria which have been set down.
I hope that when those proposals are received the Secretary of State and the Under-Secretary of State will look at them quickly and produce a detailed and affirmative response in a short time. That is necessary, first, because teams of skilled men in electrification work are now having to be disbanded and it will take a long time to put some of those teams back together again. Therefore, it is not in Britain's interests that a decision should be long delayed once that report is received.
Secondly, electrification of the east coast main line is inevitable. It will happen one day because electrified trains are cheaper, more efficient and provide a better service. There is no suggestion that anyone would close the east coast main line and so we must have the best possible service on it in the long term. That means electrification. If it is inevitable, as I believe it is,
then twere well
It were done quickly.
Thirdly, the Conservative party has a commitment to the railway system. It is a commitment that I know my right hon. Friend the Secretary of State shares. Incidentally, it is a commitment that the House may care to note has been demonstrated by my right hon. Friend because since the Government came to power British Rail has asked for the closure of routes about 30 times and each time has been refused permission by the Government. That commitment to the railway service will be welcomed. I hope that my right hon. Friend will accept that, while the Government are moving to introduce the necessary reforms and pressures to improve the system and its quality, a decision to electrify the east coast main line would be seen by everyone as a symbol of the Government's commitment to the railways.

Mr. Robin F. Cook: I am not sure that the hon. Member for Peterborough (Dr.
Mawhinney) has read the Serpell report correctly. However, I must warn him that his reading of Shakespeare is suspect. The lines
If it were done when 'tis done, then twere well
It were done quickly
preceded a major murder. The hon. Gentleman's reading of the Serpell report is also founded on certain misconceptions as to what it contains.
The hon. Gentleman said that his constituents wanted a better railway system and that that is what the Serpell report is about. I must warn him that if the recommendations of the Serpell report are carried out his constituents will have a more dangerous railway service because safety standards will be lower. It will be slower, because the report explicitly recommends that signalling standards should be relaxed, even if that means delays. It will be subject to more frequent interruption, because maintenance work will be carried out on weekdays when the hon. Gentleman's 500 commuters are trying to get to London. I cannot believe that that is the kind of service that his constituents want.
It is not surprising that in the debate the Serpell report has found few friends, unless we count the hon. Member for Faversham (Mr. Moate), whose most encouraging comment about the report was that it did not come to any real conclusions, but only suggested things that we should think about. If that is all we wanted, surely we did not need to spend £600,000 of taxpayer's money to get it. We could have asked a Member of the Social Democratic Party to make a speech saying what we needed to think about without arriving at a decision for action, as they are for ever doing.
The report is valueless as a means of deciding what needs to be done in the public interest. The main reason that Serpell is valueless is that it refers several times, both at the beginning and the end, to a railway system that provides a satisfactory return. Throughout its report the committee appears to consider a satisfactory return simply on the narrow ground of a surplus on the balance sheet. Nowhere does it appear to grasp the fact that a satisfactory return in terms of the railway network might be a cost-effective railway system. It does not seem to grasp the distinction between a surplus on the balance sheet and a cost-effective railway system. Instead of asking how a cost-effective railway network can be achieved, it has undertaken a simple-minded exercise in how to cut public expenditure on the railway network. Even in those terms there is some remarkably shoddy accountancy.
I refer the House to paragraph 12.21, in which the report mentions the British Railways Board's proposed savings and tops them up with some savings discovered by their engineers on a different basis. It adds the following sentence:
We recognise the difficulties of putting together figures which contain two elements: some which have been estimated against the Board's planned expenditure to 1986, while others are based on the actual amounts spent in 1981.
It is not a matter of there being difficulties. It is utterly impossible to reconcile such wildly different bases. British Rail has made it plain that it suspects that the engineers found additional savings by the simple device of double counting some of the savings already identified by British Rail.
There is a whole range of areas in which the report fails to take account of the increased expenditure which would


flow from the consequences of some of its recommendations. Paragraph 6.4 states that it did not evaluate the increase investment necessary to generate savings in engineering. Paragraph 13.21 states:
No account has been taken of the net cost of replacement bus services".
Most breathtakingly of all, paragraph 14.5 tells us that there was not time to check the resource cost of road congestion resulting from the shutting down of the commuter lines.
However, the report says that the congestion would be confined to London and would not occur anywhere else in Great Britain. How can it say that? The committee gives its explanation for its confidence in that assertion in three lines. It is based on the fact that the Department of Transport told the committee that during the strikes in 1982 congestion proved insupportable only in London. I query the cost efficiency of paying £600,000 to a team to tell the Minister what the Department of Transport told it. That apart, it is grotesquely inadequate to suggest that there will be no congestion anywhere else in Great Britain because of the limited experience gained from the 1982 rail strikes. The conclusion is based on anecdotal evidence.
The train service that I use most regularly is the one from Glasgow to Edinburgh. It is eliminated in two of the options. It is the swiftest, safest and most convenient way of moving from the centre of Edinburgh to the centre of Glasgow. It is used daily by tens of thousands of Glasgow and Edinburgh residents.

Mr. Tam Dalyell: And Linlithgow.

Mr. Cook: Yes, and Linlithgow. It is also the only real alternative to the journey on the M8, which is one of the most congested motorways. There is no question but that the loss of that railway would produce greater congestion in the south of Scotland.
What fills me with a sense of weariness at having to make these points is that there was, in comparison to Serpell, a scholarly report published six years ago by Mr. Leitch entitled "Trunk Road Assessment." He recommended that where rail closures were proposed there should be a cost-benefit analysis of the railway provision and the competing methods of providing transport needs supplied by that railway line. There is no reference in Serpell to that report. As far as I can make out, no Member of the committee was aware that that report had been produced. Far from the Serpell report taking us into the future, it represents a massive leap back six years beyond the point at which the committee provided its report to the Minister of Transport.
I come to the appalling incompetence of the technical work that was supplied to the committee. One's reaction to its quality alternates between hilarity at the high comedy of some of the results and fury that they should be put forward as a firm basis for future policy decisions.
There is a number of ghastly howlers. I shall illustrate one from my region. In no fewer than two of the options the Highland railway stops at Crianlarich. Crianlarich is a hamlet, not a village. I say nothing critical of the good people of Crianlarich when I say that there would be no station there if it were not for the fact that it is in the glen through which one has to pass on the way to Oban, Mallaig and Fort William, which are reasonably populated. It is

absolutely lunatic to run the railway to Crianlarich and stop it there. The only point of a railway going there is to go on to Oban, Mallaig or Fort William.
The line from March to Spalding is retained in two of the options. British Rail closed that line last year. It is still in two of the options, although the tracks have been lifted.
There are major strategic failures. There is a failure to reckon the loss in revenue to the main lines which results from cutting branch lines. A railway system is like a river. If the streams are cut away, one no longer has the river. One needs the tributaries to feed the river.
There is the consequence to freight, as my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) has pointed out. One of the consequences of option A or B is that there would not be one power station in Great Britain linked to a coalfield by a railway line, and yet the report assumes a £10 million revenue in freight traffic in options A and B.
At the end the report has the effrontery to suggest that the computer model which churned out this garbage is an important development in railway planning.
Other hon. Members have drawn attention to the impropriety of the appointment of R. Travers Morgan and Partners. I am less worried about the impropriety of the appointment, although I believe that we are entitled to expect from members of a departmental committee at least the same standards of public conduct that we expect from local government councillors, any one of whom would find himself in serious risk of being disfranchised if he were to put himself in the position in which Mr. Goldstein found himself on the Serpell committee.
What worries me more is the sheer inappropriateness of the appointment. There are 33 pages in Jane's "All the World's Railways" listing all the railway consultants in the world. The name of R. Travers Morgan and Partners does not appear in them. As far as I can discover, it has only once carried out a study for British Rail. It was of a limited nature, considering, of all things, rail electrification, which is wholly ignored in the Serpell report.
The lack of the consultants' experience and technical expertise shouts out fom every page of the report. However, the committee's failure is more than a failure of technical competence; it is a fundamental failure to appreciate the strength of our rail system and network. The strength of our rail system is that it provides a means of mass transit. If we want a cost-effective rail system, we should set about maximising traffic, not minimising it. Time and again, far from looking at ways in which to increase the number of passengers travelling by rail, Serpell cheerfully writes off chunks of the traffic on the basis that they could be done without.
One is left with the impression that the Serpell committee's vision of an ideal rail network would be one that provided a service in privileged areas such as London and the south-east for a few wealthy people who could afford to pay an economic price for their tickets—in short, a railway service catering solely for the kind of people on the Serpell committee. I cannot believe that any hon. Member wishes that vision to come to pass.
The Secretary of State made it clear when he answered questions the other week that there would be no snap decisions on the report. The Secretary of State for Scotland was more explicit. He is quoted in The Scotsman as saying:
you can assume that nothing drastic will happen for the next year or two at least".


I am confident that nothing drastic will happen at least until after the next general election.
The tragedy for British Rail and for our transport system is that we cannot afford to wait for decisions. Ministers may say that they do not favour a major contraction of the network, but if vital investment decisions are not taken soon that contraction will take place in any case. It will be pointless for hon. Members to make sincere, genuine pleas for the retention of the branch lines in their constituencies, because unless further tranches of investment are released soon there will be no locomotives to maintain services on those lines, whether the Secretary of State wishes to close them or not.
The tragedy of this whole episode is that financial decisions were delayed for seven months pending the Serpell report, and I view with consternation and anxiety the possibility of a further seven months or more delay in taking decisions on the contents of the report.
Finally, I cannot refrain from making the following comparison. On Tuesday, the Government published their White Paper on public expenditure. One of the many fascinating statistics to emerge from it is that by the end of the Government's period of office public expenditure on defence will have increased by 23 per cent. in real terms. I am struck with wonder at the contrasting priorities of a Government prepared to find such an extravagant sum for that budget while remaining obsessed with finding ways to whittle away expenditure on our railway network, irrespective of the damage that will be caused. I doubt whether it is possible to build a civilised society on those priorities. I am certain that we cannot create a thriving, growing economy on the basis of a savage attack on our transport infrastructure.

Mr. Dafydd Wigley: If the implications of the report are put into effect, Wales will become a transport desert. At £600,000, the report is extremely bad value for money. Even at this late stage, one wonders about the status of the report. The accompanying letter, printed on page 1, presents the report for "early action" by the British Railways Board. If there is early action on the alternatives set out in the report, the options are greatly restricted and do not open up the decisions that we believe should be taken.
I agree with hon. Members who have said that the report is extremely negative. It has not applied itself to the question of building up the railways through an investment plan. Without investment, we shall be left not with the status quo, but with a gradual deterioration of the network as various parts of it become inoperative.
It is incredible that only one paragraph of the report deals with electrification—one of the most important investment decisions facing the board.
There is also no analysis of comparative energy costs between rail and road. Rail transport has great advantages in this respect and it will become increasingly important as the years go by. It would be tragic to cut away the network now, when in 30 or 40 years we may find that it is an essential mode of transport and we shall then greatly regret having destroyed the infrastructure. More thought should have been given to achieving fair competition between road and rail. At present, British Rail must sustain the cost of keeping the network infrastructure open, whereas for the roads the cost is met from taxpayers' money. I suggest that the maintenance of track and

infrastructure should be a direct Exchequer charge, and that decisions as to the viability of services should be taken on that basis.
Any decision of this nature requires a proper cost-benefit analysis, but such an analysis is patent] y absent from the report. A report undertaken in as hurried a way as this one was cannot go into that kind of depth. For that reason, the report should not have been rushed.
The most extreme of the six options makes Beeching seem like child's play. Beeching suggested cuts of between 20 and 30 per cent. in the network, but the most extreme of the Serpell recommendations would chop 84 per cent. from the network. The Beeching proposals were mere trimming and pruning compared with that kind of root and branch axing. I intervened in the Secretary of State's speech to ask which options he ruled out when he introduced the report a couple of weeks ago. I was disturbed to hear his reply that option A was the only one that he excluded. That means that option B and the other extreme proposals are still in play. The Minister shakes his head, but that was the reply I received. If the Minister wishes to correct that impression, I shall happily give way. I see that no intervention is forthcoming. If these are the only options being considered, the one thing that should be axed is the report, and right now.
On the structure and control of the railways, particularly in Wales, many people have advocated that the railway services should be linked with the Welsh Office. There was a recommendation to that effect from the Welsh counties committee last year. As the Welsh Office controls roads, there is a strong argument for bringing road and rail under the same control to achieve an integrated system. The Financial Times today refers to the delegation of power over railways, particularly to Scotland and Wales. If such a devolution of power is considered, I would emphasise the point made in The Times today:
Given adequate financial support from central Government, it is now seen as a real possibility. It could be the best hope of saving the lines that Serpell identified for possible closure".
It is essential that the financial support should be forthcoming. Otherwise, such a development would be useless.
A number of railway lines in Wales will be closed under several of the options. For instance, five out of six options recommend closure of the Conwy Valley line. Yet that line serves the Trawsfynydd nuclear power station, so nuclear waste will presumably have to be carried by road. The Amlwch freight link carries dangerous industrial waste; but, again, five out of six of the options recommend closure. Five out of six options would also close the central Wales line, and five out of six recommend closure of the rail link to the important port of Fishguard. Indeed, three out of the six options envisage no line beyond Swansea. That is incredible in view of the importance of Pembrokeshire as an oil port area. In options A and B, the line runs only 20 miles into Wales and stops at Cardiff, leaving Wales devoid of lines. As we have heard, the proposals for Scotland are similar.
There is only one railway line in my constituency—the Cumbrian coast railway line. Five out of six options recommend that it be axed. There has been uncertainty about the future of that line for some years because British Rail could not find the necessary capital investment. It requires only £4 million or £5 million to bring the track and the Barmouth viaduct up to standard—£30,000 per mile


compared with £12 million per mile being invested on the Colcon road in north Wales. Yet the Cumbrian coast railway line is vital to the tourist industry and to take local people to work and their children to school. If it were closed, two more barrages or road bridges over the Mauddach and Dyfi estuaries would be necessary, probably at a cost of about £50 million, but that has not been taken into account at all.
The most devastating suggestion for my area is the possibility that the line from Crewe to Holyhead will be closed. This vital link is part of the official Euroroute to Ireland. In three out of six options, the route is down for axing. Its closure would be a body blow to any hopes of economic regeneration in north Wales. It is essential for tourism and for industry. The uncertainty caused by the Serpell report will make it difficult to attract industry to set up in areas such as Gwynedd.
We want this uncertainty to be ended, and ended now. We want the Government to make it clear that the extreme options—not just option A, but the other four—or, better still, the report altogether will be axed.
There are tremendous road problems in areas such as Anglesey and Carnarvonshire because of the volume of road traffic, particularly in summer. It will be even worse when the large lorries have to take what is transferred from the railway if it is closed. The closure of the rail link from Crewe to Holyhead would mean the end of the container service between Holyhead and Dublin, which would be a body blow to Holyhead as a port. It would mean the end of the Sealink shipping service to Dun Laoghaire as the proportion of foot passengers carried by train is high.
A commitment to electrification of the line to Holyhead is essential to the development of that port. If the railway line is closed, the port will be run down and the base of the economy in that area will be threatened. I apologise for referring to this matter when the hon. Member for Anglesey (Mr. Best) is not here, but it is of great importance not only for his constituency but for all north-west Wales.
The replacement bus service suggested by the report could not provide an efficient or speedy link from Holyhead to Crewe, because of the poor quality of the roads in north-west Wales and Anglesey.
Those three points are of considerable importance for the future of Holyhead. The closure of the rail service would inevitably mean the end of the port. If the north Wales coast line is not kept open, it will make the work of north Wales Members, who wish the area to be developed, virtually impossible.
My fear is the fear expressed in The Guardian on 24 January:
The Treasury is thought to be the most determined to prevent the Serpell Report from slipping into oblivion. Mr. Leon Brittan is reported to want the matter kept alive, ready for revival after the next election.
The writing is on the wall and it is up to us now, before the election, to bury the report.

Mr. Terence Higgins: It is clear from a number of speeches this evening that some hon. Members are inclined to paraphrase the late Lord Butler and say that this is the best Serpell report on railway finances that we have. It has received a very unsympathetic response in the House.
The letter at the beginning of the report records that one of the members did not tell the committee until the last minute that he proposed to submit a minority report. It must be one of the strangest letters ever received by a Secretary of State in these circumstances. It is particularly unfortunate, not least because the dissenting member of the committee expressed his views about the committee's recommendations without giving the rest of the committee a chance to say what it thought about his minority report. It is a strange report in that respect.
Another point that is worth making—it cannot be made too strongly—is that the report sets out various options. It reaches some fairly vague conclusions, but does not make specific recommendations. That is in marked contrast, as hon. Members have pointed out, to a number of other reports, not least the Armitage report on heavy lorries. There was immense controversy about the Armitage report, but we were at least clear on the committee's views. The Government could accept some and reject other parts of the report, and the House could reach a conclusion. It is not helpful to set out every conceivable option in a politically naive way, ranging from an option that no one will get along with to the other extreme.
The hon. Member for Caernarvon (Mr. Wigley), Opposition Members, some television commentators and others have said that the Conservative Government will not implement the report before the election, but that afterwards they will take the extreme option. That creates a strange situation.
Therefore, the Government should in due course make their views known. It would be wrong for them to rush forward on the basis of the report and feel that they are obliged to say exactly where they stand. The report contains much relevant information and we need to appraise it in the light of other information available to the House.
As hon. Members have pointed out, the conclusions run to half a page only in the majority report and to three quarters of a page in the minority report. They are in the most general terms and do not give us clear views on the conclusions reached by the committee.
It is clear that the committee is worried about two aspects of British Rail's operations—its ability in the matters of project appraisal and of forward planning. In both of these respects, the committee makes a number of cogent points that should have the attention of the House. I am sure that Sir Peter Parker and his board will need to give them careful consideration.
It is essential for the industry to have an efficient system of planning which will provide the House and the Minister with a reasonable basis on which to take decisions. In that context, the Parliamentary Control of Expenditure (Reform) Bill, introduced by my right hon. Friend the Member for Chelmsford (Mr. St. John-Stevas) and given a Second Reading last Friday, is important. The Comptroller and Auditor General, under that measure, would have a continuing participation in the British Rail operation, and that should give it a real chance. The Comptroller and Auditor General should be able to make positive contributions to planning and project appraisal. Sir Peter Parker has kept a low profile on this issue, but the Bill presents an opportunity for improving efficiency in precisely the areas where the report makes the more valuable contribution.
I wish to comment on some aspects of what is summed up by the awful word "privatisation". There is a real


opportunity here, for example, in catering, about which we had a number of press reports yesterday. As the hon. Member for Worthing, I am bound to agree with remarks made about the Brighton Belle and the Pullman service. Rolling stock on many lines, such as those in my constituency, is in a deplorable state. More private capital would increase the choice available to those who necessarily have to travel by train. When considering investment in electrification, we have to recognise that the inquiry was carried out against a background of industrial dispute that can only be described as turbulent. There are a number of important implications. My right hon. Friend the Secretary of State drew attention to the extent to which Labour Members were prepared to back unjustifiable industrial disputes in British Rail last year. Sir Peter Parker had the greatest difficulty not least because it was difficult to know whether any agreement that was made would be carried out.
We can judge the argument for further investment only in the overall context. Time and again, we quote the still hazardous problem of the Bedford-St. Pancras line and the £150 million investment that is not being properly used. We want a more efficient railway. We want reasonable investment that is profitable and will improve the service to passengers. However, that will happen only if there is a corresponding response from the trade unions. It is a matter of great regret that that has not happened, certainly during the past couple of years. We can only hope that, against the present background, there is more scope for investment.
I agree with those who have said that the Serpell report takes us no further on the vexed question of electrification generally. In this connection, my hon. Friend the Member for Peterborough (Dr. Mawhinney) made a number of cogent points.
I want to comment briefly on another aspect. The report, in page 27, deals with off-peak travel in what seems a confused paragraph. It seems to imply that concessions should be given for off-peak travel, and that it may be possible to eliminate the costs incurred. That is a somewhat strange approach. If we are to invest in the railways, we must invest to meet the traffic at the peak. We have done nothing like enough to try to reduce the travel peaks, not least in the south-east.

Mr. Fry: Does my right hon. Friend accept that, unless we encourage use at the peak, at the same time as giving a heavy subsidy, the demands on the public purse will be endless? That is the danger.

Mr. Higgins: I agree with my hon. Friend the Member for Wellingborough (Mr. Fry). It seems that I did not make myself clear. What worries me is that we necessarily invest to carry the peak traffic and that we do not do sufficient, either in the immediate areas of the railways—for instance, by differential fares—or, more broadly, in terms of working hours—for instance, in the Civil Service—or in giving incentives to people in business to stagger their working hours, so that we do not need to invest so much to reduce the peak and can use more efficiently the capital that we invest.
The final matter that I wish to bring to my right hon. Friend's attention relates to the longer term. This matter, which has not been raised, needs to be considered. Those who take the extreme option say effectively that we should concrete over the railways and send everything by road.
I do not take that view. In my view, the railways have a vital contribution to make. At the same time, however, we face a major problem where the road network approaches and goes through central London. The railways are now taking a better view about the utilisation of land that they are not using. Certainly that has been an improvement in recent years. However, we need to consider more carefully, as one motorway after another moves closer and closer to central London, whether we should build roads over the railways. The board could reasonably charge a certain amount for that, or it might even consider building the roads on a toll basis. It could be said that that would create even greater congestion in central London. One could argue that perhaps we should have massive car parks over the railway terminals, and not allow the cars out at this end, or only at a very high cost.
In many respects, insufficient imagination is de voted to transport problems. The relationship between roads and rail, and the way in which they can co-operate together to their mutual benefit, is a matter to which we shall need to give more attention in the longer term, which is the concern of this report.
The Opposition motion links condemnation of the Serpell report with an implication that the Opposition are against the idea of higher fares, and so on. It is important to appreciate that the Serpell report simply sets out the options. The connection between the report and the other points in the Opposition motion is not clear. Indeed, I do not believe that it exists at all. That is a matter for broader policy, which we can debate more efficiently on another occasion.

Mr. Les Huckfield: I speak in this House on behalf of the Associated Society of Locomotive Engineers and Firemen. In that context, the right hon. Member for Worthing (Mr. Higgins), when he talked about co-ordination between road and rail at the end of his speech, was getting to the meat of the matter, the subject that many of us felt should have been discussed tonight. The Committee of my right hon. and learned Friend the Member for Aberavon (Mr. Morris)—we should all be grateful to him, incidentally, because his report invented the concept of the social railway—carried out a much broader-based investigation, and took into account the effects on road investment and, much more worrying, the effects on road congestion. So I am glad that the right hon. Member for Worthing got round to that issue at the end of his speech.
I am not here tonight to apologise for the Associated Society of Locomotive Engineers and Firemen because the facts speak for themselves. If one considers the peak of railway employment in 1950, and one considers the numbers of train crews now, it is evident that the train crew numbers since 1950 have reduced by 70 per cent. I know of no other group on the railways, with the possible exception of signalmen, that has been reduced by similar numbers. I wish that Conservative Members would take cognisance of the fact that staff numbers, particularly in higher administrative grades, have increased by mo.-e than 30 per cent. in the same period. So, if we are talking about increases or decreases in productivity, I wish that Conservative Members would give the whole picture.
When one talks about the disputes last year—I refer to this issue because Conservative Members have referred to it—it is interesting to note that Serpell says that last year's


disputes are alleged to have cost about £140 million. I have seen figures even higher than that. Even British Rail's evidence to the railway staff national tribunal said that over the next four years, if it could get all that it wanted from flexible rostering, it would not save more than a mere £9 million. Having lost about £140 million with an alleged and projected mere £9 million saving—the board's own figure, not mine—one begins to wonder what the dispute was all about. Was it about flexible rosters or was it about breaking ASLEF? Certainly the savings that are supposed to emanate from flexible rosters do not justify the stand that the board took.
Many of us suspect that the real savings from flexible rosters—now that they are supposed to be being worked, although in fact only a few are being worked—will come only when the depots start to close. When that happens, Conservative Members will have to be very careful because that will mean that stations will close as well. Again, I hope that Conservative Members will consider the whole picture.
If the Secretary of State wanted his much forecasted great debate on the railway system, and if he did not want, as he alleges, some of the extreme reactions that have resulted from it—many of the reactions following the Serpell report have been because of his attitude—if he had come to this House and immediately ruled out the more extreme options in Serpell, particularly some of the nonsense about reducing track and signalling safety standards, we might have had a more balanced debate. It is because the right hon. Gentleman did not rule out those extreme options that we have had some of the reactions that we have had. Is it any wonder, for example, that many midlands towns and large communities in that area are now worried that one of the options in Serpell predicts only six railway stations in the whole of the west midlands—Nuneaton, incidentally, not being one? When one realises that whole areas of the country could have no railway access at all, and that many of those areas previously deprived of railway access know what happens when a bus replacement service is then withdrawn, is it any wonder that many areas are deeply concerned and shocked, not only by the Serpell report but by the right hon. Gentleman's reaction to it?
Therefore, many of us are bound to wonder whether we are being softened up for what the Secretary of State would like to do after the election. The Government can then come back and say "At least it was not as bad as the worst option in Serpell. At least it was not as bad as the option that proposed to reduce the network by 84 per cent. You should think yourselves lucky that under this new Conservative Government, recently re-elected, your railway station has been saved." That tactic will be applied by the Secretary of State.
The debate is a little like the Beeching debate in 1962. I was not here then, but Conservative Members praised Beeching for producing an excellent report. However, when the branch line in their constituency was affected, out came the begging bowl with the protests, the deputations, and the lord mayor, saying, "Our station must not close". I forecast that exactly the same will happen if the Conservative Government, God forbid, are returned after the next election.
I could give many more figures for some of the achievements to which I wish the Secretary of State could

have referred. They are Serpell's figures. It is interesting to note that between 1975 and 1982, despite difficult economic circumstances, particularly in the past three years, passenger miles operated have been reduced only from 18,800 to 17,300. Revenue per passenger mile has increased from 5·2p to 5·3p. The grant increase over the same period, in difficult trading circumstances, was only 3·9p to 5·4p. To have maintained that performance in those difficult circumstances is a commendable achievement.
If one looks at the passenger miles operated one finds that in 1979, before the onset of this Government, passenger mileage was as high as in 1961. That is a considerable achievement, bearing in mind the vast increase in the numbers of passengers carried and the reduction in the route network. By 1981 reduced fares and special promotions were producing 34 per cent. of total revenue. That included 2·6 million railcards, which produced £140 million.
Is it not interesting that just when railway passenger mile figures are starting to move up because special promotions, discounts and rail cards are encouraging travel, the Serpell report is published? Just when all those achievements should be extended and built upon, the Government start to talk about cuts.
Unfortunately, hon. Members have not referred much to safety. I hope that the Minister will refer to it. One section of the report has the temerity to suggest that signalling should be replaced only when it
is unable to cater for the timetabled service".
That is a dangerous and lunatic proposition. Any locomotive driver or anyone who works on the railways will tell the Secretary of State that safety standards are low enough already. I do not blame that on the staff. I blame it on the lack of finance. I am sure that the railways management has told the Secretary of State this on many occasions. According to its calculations, there are already about 800 miles of maintenance in arrears and a further 300 miles upon which it has to impose almost permanent speed restrictions. It is getting to the stage where, if the railways do not have the investment soon—according to the corporate plan, this was supposed to be the critical investment year—about 3,000 miles of the route will have to be withdrawn simply because British Rail does not have the money to maintain the track and keep it up to standard.
In the railway inspector's report, Lieutenant-Colonel McNaughton said that many of the accidents that are caused arise
from the direct or indirect effects of the continuing financial problems facing railway management … I do not see the position improving so long as the average age of the track goes on increasing.
That was said by the chief inspecting officer appointed by the Secretary of State. He is telling the right hon. Gentleman that unless the provision for the maintenance of track is increased, the accident record will get worse. Yet the Serpell report dares to say that maintenance of track and safety standards should be reduced. If the Secretary of State does nothing else, he should deplore, condemn and rule out that most nonsensical part of the report.
There is no part of the report where Serpell seems to have a good word for the railway system. If one looks at the figures for passenger miles, the revenue per passenger mile, the way in which British Rail has been gradually extending the benefits of railway travel to old-age


pensioners, young people and families and the special promotions, one sees that the railway system is at last starting to be accessible to more sections of the community. I would have hoped that, as we are coming up to an election, the right hon. Gentleman would be in favour of extending that trend. However, because he has failed to rule out some of the dafter, more stupid and extreme options, he is receiving the present reaction. I ask the right hon. Gentleman, not only on behalf of ASLEF but on behalf of the travelling public and whole townships, at least to say that he will condemn the most extreme parts of the report. We shall then have a more balanced debate, which the right hon. Gentleman has been seeking.

Mr. Peter Fry: The trouble with the debate is that far too many hon. Members have come along with the intention of burying Serpell rather than praising it. It is a great pity that hon. Members have tended to mount their hobby horses and on predictable lines as opposed to addressing themselves to the basic problem that was the main cause for the Secretary of State inviting Sir David Serpell to produce the report.
Ever since 1975 there has been an injunction on the British Railways Board to operate the existing network. Ever since then successive Secretaries of State have viewed with exceeding suspicion any attempts by British Rail to say how much the public service obligation ought to be to keep that network going. When we have been investigating the whole range of public expenditure, surely it is proper for, and the duty of, any Secretary of State to try to investigate whether the amount of public money that he suggests should go to the British Railways Board is being used in the best interests not just of the board and the railway network but of the travelling public.
One problem was that certain parts of the report were leaked several weeks in advance of publication. Some sections of British Rail's public relations activities have nothing to learn from any dirty tricks department in any country or organisation. What was leaked to the press was not the six options or the fact that half the report was based on how to keep the existing network going, but sections that would exclusively and particularly excite passion. What did my constituents say to me? They wanted to know whether they had to pay an extra 40 per cent. to commute to London, or whether it was true that there would not be a line running through Wellingborough up to Derby and Sheffield.
The leak was deliberate, so that before the report appeared Serpell was damned. I do not know how the leak came about. I too, like other hon. Members, have the greatest respect and admiration for Sir Peter Parker. But British Rail should take care to ensure that the activities of some parts of its public relations department are not repeated in future. In the long run, it is counter productive and will do no good to British Rail.

Mr. Alexander W. Lyon: As the hon. Gentleman will have read the Serpell report at his leisure, can he tell us whether the line through Wellingborough will be closed? The threat is still there in the report.

Mr. Fry: If the widest option were to be adopted the line would disappear, but we have already heard that the widest option is not to be accepted.

Mr. Alexander W. Lyon: No.

Mr. Fry: The worst option has been excluded. My answer to the hon. Gentleman is simple. Party politics aside, neither he nor I would expect any Secretary of State to accept what one would call the worst option. Pure practical politics and common sense dictate that no Secretary of State would preside over the total dismemberment of the rail system. This is where the debate is doing a disservice.
There is an important and fundamental question to be answered: what kind of remit should the Secretary of State be giving to the British Railways Board? The trouble is that it has not been clear. This applies not just to my right hon. Friend but to previous Secretaries of State Earlier today the Secretary of State in the last Labour Administration, the right hon. Member for Stockton (Mr. Rodgers), said that his solution would be to give a certain amount of money to the British Railways Board and tell it to get on with the job. But he forgot to say how much of the network he would expect the board to operate. His advice was useless without that information.
All that I and, I think, the British Railways Board are asking for is a degree of certainty about what is expected of the board. Is it to be given a flat amount of money and told to manage the network on it, if necessary, by closing parts of it; or is it to be told to keep a certain size of network open and that the Government will make up with the public service obligation the money that is needed to keep it? After all these years it is high time that this fundamental issue was sorted out.
That is a simplistic approach. I know that there are complicating issues, one of which is that the British Railways Board has found it impossible to get its answers right. I do not blame the board. The recession has knocked its immediate plans sideways. If one examines the board's forecasts and the way its plans have come out, there is no doubt that it has gone sadly astray. Nonetheless, and I take heart from this: the board says that it could save approximately £147 million by undertaking certain changes in its operations. All credit to the board. Perhaps Sir David Serpell was a little naive in accepting the ways in which the £147 million saving would be achieved. None the less, I do not argue about the figure. The point is that economies are possible. My right hon. Friend is entitled to ask the British Railways Board for those savings.

Mr. Spriggs: I think it is fair to inform the House, while the Minister is present, that long before the Serpell committee was set up Sir Peter Parker was telling the Government and Members of Parliament on both sides of the House that unless he could get a proper financial understanding, that is, a 10-year rolling programme, he could not guarantee to carry out his job as chairman of the board, to provide a proper railway service throughout the country.

Mr. Fry: I respect the hon. Gentleman's point of view. However, although money was provided in the past, for instance, for the Bedford to St. Pancras line, we are still waiting to see the benefit of that investment. I would not like the hon. Gentleman or the House to be under the misapprehension that I am not in favour of capital investment in British Rail. As a member of the Select Committee on Transport, I agreed with the report on the need for electrification. I stand by that.

Mr. Stanley Cohen: Will the hon. Gentleman confirm that the saving to which he refers will not affect the safety aspects of British Rail?

Mr. Fry: I accept that. I do not accept what Serpell says on safety. I do not think that any Secretary of State will want to see a diminution of safety on the rail network. Nevertheless, there are grounds for economies. When the Secretary of State is deciding the amount of money he will allocate to British Rail, he is entitled to ask it to make the economies that can be made and to ask whether the travelling public is getting the best value for money.
This brings me to the vexed question whether there should be closure of certain parts of the network and their replacement by buses. I declare an interest as an adviser to certain bus companies. This issue will have to be investigated closely in future years if only because British Rail itself has been investigating whether buses might replace trains on expensive and low-revenue producing lines. It is, of course, true that when buses replaced trains, following the Beeching report, the results were disappointing. The buses were rapidly withdrawn. It is hardly surprising that the attempt to run buses, without any subsidy, on a route that was not attracting passengers in the first place should prove not be successful.
One service performed by Serpell is to kill this idea. His findings show that there is no reason why such an alternative should not be considered. There would be need for British Rail direction to ensure that rail services were co-ordinated at either end of the route and to provide a degree of certainty that the routes would not disappear two or three weeks after the trains had been withdrawn. It may appear trifling, but if one studies the options involving the least reduction in railway lines, one discovers that over £100 million could be saved. The Secretary of State is right to be asking whether that amount would not be better applied to capital investment in British Rail rather than subsidising a few miles of line carrying few passengers, where the train could be replaced by the bus.
This is the essence of the question. I do not believe that my right hon. Friend the Secretary of State wll ever apply the broad brush treatment and wipe away the bulk of the rail system. However, my right hon. Friend is entitled to examine whether the existing system is ideal and right for the future. No particular line need be sacrosanct. That is what I am asking. If my right hon. Friend bears that in mind and explains at the same time what he wants from British Rail, as Serpell has asked, by giving clear directions to the British Railways Board, I believe that Serpell and today's debate will have been useful.
The debate, as I have intimated, was almost neutered at the start. But a continuing debate will prove valuable not only to my right hon. Friend but also to the House and to the country. We need a debate on the future of the rail system. We need to debate how much of the system should be supported by the taxpayer. After that, we want answers from my right hon. Friend. When he has given his directions, we want action from the British Railways Board.

Mr. Michael Martin: Not long ago my community had four British Rail engineering workshops—some of them were private—Cowlairs, St. Rollox, Hydepark and Atlas. In their heyday, 10,000 highly skilled engineers worked in those workshops. Most

people in the Springburn area worked locally. Anyone who travelled to work would have been considered slightly eccentric. Sadly, now only one loco shed remains at Eastfield. The position is very serious.
I am worried about the impact that the Serpell report will have on tourism in Scotland. The proposal that railways should go no further north than Edinburgh or Glasgow would affect the regions in Scotland that depend upon tourism. To do away with the railways in those regions would mean cutting off the only source of employment for people in the highlands of Scotland.
Scotland has beautiful scenery. We have some of the finest scenic railway routes in the world. They are second to none. The Government should encourage tourists to use those routes. The Government must ensure that the facilities are used so that the railways and tourism in Scotland thrive. I am worried about the only British Rail engineering workshop that remains. We must have a commitment from the Government on investment, and especially development.
I worked for the Rolls-Royce aero engine company, and I remember that in 1970 the Tory Government would not allow it to collapse because of the serious effect that that would have had on defence policies and strategies. Rolls-Royce did not fail because of lack of workmanship—quite the reverse. The problem arose because much of its resources had to go into the development of engines which took away money and capital from that industry.
We need development in British Rail engineering. We have the finest engineers in the world, and we should be able to say to people abroad, "Come to Britain and we will show you advanced British Rail technology"—technology that any country would be proud to have in its railway system. If we can get such a commitment from the Government, not only my community but communities throughout the United Kingdom will have a future.
The official unemployment figure quoted for my constituency in 1981 was about 25 per cent. More and more people have gone on the dole since then. More and more young people have had to get involved in the so-called job creation schemes. I am being moderate when I say that the unemployment rate in my constituency is about 30 per cent.
A book called "The Springburn Story" is very well read in my constituency. It is all about the glorious past when we built locomotives for the world. I do not wish to wallow in the past. The past will not put bread on anyone's table. What worries me about the Serpell report is that it could be the last chapter in the Springburn story.
I have made a big investment in my community. I live in my constituency and my children are being brought up there. I want the children in my constituency to be able to learn the skills that their fathers and grandfathers learnt before them. I plead with the Government to make sure that they put this report on the scrap heap and to make some investment in our railway industry.

Mr. Richard Needham: When I read the Serpell report, it reminded me of my cantankerous old aunt who used to stay with my family at Christmas and who criticised my poor mother in the greatest possible detail for everything that she did. Unfortunately, my aunt never came up with any solutions that were not either ridiculous or impracticable. But because my parents were poor and my aunt was very rich, we were always forbidden


to criticise her on the ground that when she finally passed on she would leave us her money. However, she left it to a cats' home. The British Railways Board must feel about this report as my mother felt about that old aunt.
The first half of the report is too detailed in its criticism and goes to the most extraordinary lengths to examine what British Rail is or is not doing. Paragraph 5.3 states:
The Board must be on guard against retaining market share at too high a cost.
I am sure that the board is aware of that. Paragraph 5.6 states:
The range of fares, travel cards, and special promotions now on offer to the passenger is large and confusing"—
as is this report.
The Board are planning to introduce a revised and simplified structure. We consider this is urgently required.
There again, the report states something that, if it is not obvious, should be taken into account by the board or by management of any calibre.
Paragraph 5.12 states:
The introduction of automatic barriers would counteract fraud and reduce staff costs.
If the Serpell committee spent almost all its time making such criticisms in such detail, and felt that that was its main task, we need not a Serpell report but a new board. I do not accept for one moment that the management of British Rail is so bad that it does not realise the obvious necessity of dealing with most of the detailed criticisms in the report.
When the report is not going into the nitty-gritty details of what British Rail's management should and should not do, it is superb at stating the almost complete obvious. Paragraph 6.12 states:
The softwood sleepers widely installed in the 1950s and 1960s on what are now lower category tracks are approaching the ends of their lives and will need replacing.
I am surprised! I wondered what would happen to them when they reached the end of their lives. Paragraph 6.35 states:
Rail vehicles need to be durable, reliable and safe.
Good gracious me!
Such platitudinous comment does not give one confidence in the way that the report has been put together. The committee seems to have spent all its time on such details and to have spent insufficient time thinking through the practical strategies that my right hon. Friend asked it to consider. As hon. Members have said, the conclusions take up only half a page. One states:
Our function, in the 7 months available to us, has been to mark out opportunities and options, not to develop them in detail.
However, the committee developed in the most incredible detail its criticisms of the board of British Rail when it should have exercised its mind in developing the sensible and practical strategies that British Rail should consider.
My constituency's largest employer is Westinghouse, which relies almost entirely on the railway industry. When I telephoned the managing director and asked him for his view, he said, "For goodness sake, say to the Secretary of State that what they must not do is close Chippenham station. If they do, how on earth will I be able to get all my export orders because I won't have a station to bring all the foreign buyers to and I won't be able to impress them with a railway system that is ever prepared to keep open the station that serves our factory." I looked in vain in the report for anything other than option A, which the Secretary of State has wiped out, for closing Chippenham station. The point is that that managing director believed

that option A was a possibility. The naiveté of Serpell in allowing that option to be considered has given to right hon. and hon. Members on the Opposition Benches a wonderful opportunity to suggest that which no one would ever bring about and to make as much political capital out of it as they could.
It is crucial that in the not-too-distant future my right hon. Friend should make up his mind about British Rail and put British Rail management and everyone else out of their misery. This uncertainty affects not only the railways but those companies that supply the railway industry. They need to know where they are going in order to make sure they have the right skills and the right staff, and to give them confidence to develop the products which will modernise and revolutionise railway technology.
I therefore ask my right hon. Friend not to pay too much attention to the Serpell report but to pay great attention to the important problems facing British Rail. Not only is that vital to the success of British Rail; his decision will also be vital to the success of the hon. Member for Chippenham.

Mr. Speaker: I am much obliged to hon. Members for their brief speeches. The winding-up speeches are, I understand, to begin at 9.20. If we continue to have brief speeches, we shall be able to fit everyone in.

Mr. Donald Anderson: The Serpell report has had an almost universally bad press, not just because of the selective quotations from it made in advance. It is an entirely negative report, simply looking at different forms of retreat on the current network. It fails to make international comparisons and is therefore totally insular. It fails to examine an overall transport policy or to pay any real heed to the needs of the consumer and passenger. It seems to have disappointed everyone.
Its genesis was the frustration of Sir Peter Parker after his years with the board, when he realised he had run against the buffers of the impossibility of getting increased investment from the Government and was viewing the decline of the rail network. Seeing that the railways were at the crossroads of advance or decline, and realising that this was a time when a positive investment policy was needed from the Government, he was hoping that the report would be a blueprint for the modernisation that is so much needed. Instead of his last gift to the railway industry being a real and positive future, however, he has seen put forward a negative report, tinged with the world-weary scepticism that is characteristic of this Government and based more on cutting back public expenditure rather than on looking at railways in the broader social and transport context.
Clearly, Sir Peter Parker and the board are displeased and disappointed with the report's conclusions, just as the Government must be. The report has no vision. It is very expensive—albeit it was carried out in seven months—and it fails to give the Government any positive guidelines, as many hon. Members have pointed out. It is unwept and unmourned and has no real supporters.
In the past few days the Government have used their propaganda machinery to talk about restructuring the railways. I accept the point that was well made by the right hon. Member for Worthing (Mr. Higgins), that the report makes some positive criticisms about British Rail's form of management. However, the Government now say that


they favour a restructuring of British Rail, perhaps on a regional and financially self-supporting basis. Surely the Secretary of State realises that, unless such restructuring is accompanied by a more positive investment policy, it will simply beg questions about the future of our railways. There will be the same lack of investment in lines, the same threat to the future of lines, the same problems of lines being lost or of trains having to reduce speed through lack of investment, whatever the new structure.
There could be new profit centres and new units, but I fear that the Government may leave local authorities to decide whether to find the finance for the network, while at the same time squeezing them through the rate support grant and the transport supplementary grant. Local authorities will be blamed because central Government are not providing the finance. They would just be giving local authorities an illusory choice, as they have done before. Restructuring cannot be positive unless the investment policy is far more positive.
Following your exhortation, Mr. Speaker, I shall try to be brief. Because of the report, the stagnation in positive thinking prior to the report, and the Government's unwillingness to react immediately, there will be uncertainty for some time. According to railway management in my area, the uncertainty and lack of continuity is already affecting customers. For example, those involved in freight in south Wales are asking management whether there is a future and whether they should look to other modes of transport.
The Government must accept that both the passenger and the freight sides of the industry are uncertain and that that uncertainty will continue until the Government make their decision clear. I am confident that the blame for that uncertainty lies in part at the Secretary of State's door. If he had come to the House when the report was first published and told us that options A and B were absurd—as we all know—and that no Government would propose those options, he would have removed some of that uncertainty at a stroke. After all, Serpell put forward several options and proposed that they were all equally worthy of consideration. That uncertainty is having an adverse effect on the industry and the Secretary of State can be in no doubt about that uncertainty when he looks at the Benches behind him.
The cynics say that the Government's response has been to kick for touch and to avoid making any decision until after the general election. One fears that—like Ravenscraig and the Think Tank report on the National Health Service—such horrors might be put into operation if the Conservative party is re-elected.
We know that Serpell's negative penny-pinching response is very much in tune with the Prime Minister's own view of the railways. It has been said, perhaps wisely, that she hates British Rail almost as much as she hates the Foreign Office. If the Secretary of State believes that the more extreme options—not only option A, but option B and the others which slash the current network—are out of court in serious policy considerations, why does he not tell the House that now and put out of their misery those Conservative Members who represent commuter seats—a dwindling band after the next election—and seats in Scotland, Wales and elsewhere? Is he waiting for the opportunity that would be presented if a Conservative Government were to be re-elected to get rid of Sir Peter

Parker when his mandate comes up for renewal in August? Are the Government waiting to replace him with a "yes" man who is prepared to carry out a severe pruning of the railway network? If the Secretary of State considers that the options put forward in the report are just not on, let him say so and put the railway industry, the country and the county Tories around him out of their misery.

Mr. Kenneth Warren: I am grateful to the hon. Member for Swansea, East (Mr. Anderson) for making what was really a speech in support of the Conservative party.
I hope that my right hon. Friend the Secretary of State will bear in mind that commuter Members support what he has said. I was delighted to hear him refer to the electrification of the Hastings to Tunbridge Wells line. I hope that his decison will not be delayed and that he can make it the first electrification decision in favour of British Rail this year.
I hope that my right hon. Friend is aware that the report crashes in on the world of transport, in which I declare an interest. I am a member of the Chartered Institute of Transport, but I am delighted to say that it did not accept my advice about the evidence that it gave to the Serpell committee.
Is my right hon. Friend aware of the impact of the report on the decision-making process in business? I hope that he will decide quickly to wipe out those options that must have an adverse impact on that process when business wishes to expand outside the major urban areas.
At first sight, I thought that the Serpell report was a reasonable study. It was an important and timely report. However, at the end of the day, having had a chance to examine it, none of us on either side of the House will be left in doubt that there is substantial confusion. One wonders about the commuter programme throughout the whole of the south-east during the next 10 or 20 years for people travelling to work. The idea that one should pay 40 per cent. more to keep British Rail in profit shows how blinkered the Serpell study was. With respect to my right hon. Friend, I wonder what Serpell's terms of reference were for examining the transport industry and the position in the south-east.
I cannot see how it is possible to examine the railways without examining the whole of the transport system including roads. That has been done in Paris. I commend my right hon. Friend to take a look at Paris. It is a delightful place to visit, and I should be only too pleased to tell him the best places to stay. He should see the way in which that city has indulged itself in an investment programme for the improvement of surburban and commuter services. It is larger than the whole of the British Rail investment programme for the United Kingdom. I also commend to him the fact that the transport policy of Paris is spread over 15 years and takes into account both roads and railways.
I have a query about the Serpell report in its mathematical modelling. I had naively assumed—engineers are always naively assuming—that there was some mysterious model to which Serpell had referred to find out how to relate his information to the real world in which we live. I tabled two questions today—which my right hon. Friend courteously answered—about the model to which Serpell referred. I assumed that it was in my right


hon. Friend's Department. I found that the Department has no such model. So where did Serpell find his information and how did he derive the answers?
The report refers to the load factor along a line being constant. For example, on the line between London and Penzance, people board at London and get off at Penzance. We all know that that is impossible. The maps in the report show that option A would give a network with nothing in Wales—I am sure that you, Mr. Speaker, would not want that—nothing in Scotland and nothing in the south-west. Option B provides for the same, but, even worse, none of the prime freight lines is included. My right hon. Friend must wipe out options A and B immediately.
Looking at the map, I realised that one freight line is close to my constituency. It runs from Appledore to the Rye golf club. It is supposed to be an important line. I concluded that it related to the Dungeness power station and is supposed to carry nuclear fuel. Several of the options provided no link with the main rail network. How could Serpell seriously ask hon Members, on behalf of the public, to consider a suggestion that nuclear fuel should be moved along a short section of line, transferred to the road and then back to the railway? It is in those small details that we must test the value of Serpell. I hope that the conclusion tonight will be that Serpell came, saw, was recorded, and went.
You will be familiar, Mr. Speaker, with options Cl and C2, with the offer of a railway line from Aberystwyth to Devil's Bridge, which is 40 miles from the next British rail station. Did Serpell realise that on the Stratford to Leamington Spa line, which is recommended for closure, 80 per cent. of the passengers continue their travel on the main lines? My hon. Friend the Member for Faversham (Mr. Moate) referred to direct costs, but he failed to note that point. Serpell failed to take account of the value of feeder line passengers using main rail networks.
Option C3 would allow a passenger to travel from Paddington to Exeter, but not to continue to Plymouth and Torbay. Yet one third more of that line would double the revenue. Option C2 would have passengers ending up in a bog in Banffshire, the northern terminus in Scotland. As Parliamentary Private Secretary to the Secretary of State for Education and Science, I must be careful when I say that the terminus would be called Keith.
I have considerable concern about the report. I thought that a report costing 10 times as much as the Franks report would give the House an accuracy of study, understanding and reality that would benefit us all and enable us to make some real decisions about British Rail. Although I support the Government's amendment, I regret to say that the report should be filed and forgotten.

Mr. David Stoddart: Since its publication I have heard many comments about the Serpell report and its cost. Many of the comments that I have received have been quite unprintable but the tone of all of them has been hostile and condemnatory. The Opposition motion rightly seeks to condemn the Government for their failure to reject the report outright. I hope that the House will support that motion in the lobby tonight.
I perfectly understand that the Serpell committee was under pressure of time and apparently believed also that it had restricted terms of reference. Nevertheless, the report deserves to be treated contemptuously because of its lack of coherence and its lack of erudition. Hon. Members

who have spoken tonight and have analysed the report have shown that the report lacks erudition in every sense of the word.
It also deserves contempt for giving comfort and encouragement to the blinkered anti-railway lobby, which would close down railways completely and concrete over the railway tracks. It was interesting that when the Secretary of State said that he rejected the extreme option, option A, he did not actually reject option B. He said nothing about option B. The House should understand that option B would reduce the railway network to 2,220 route miles. The Secretary of State would apparently consider option B, since he mentioned only option A.
The House and the country deserve an absolute assurance from the Secretary of State that the railway network will not be slashed either before or after a general election. I hope that that assurance will be given tonight. Indeed, the right hon. Gentleman needs to give that assurance and make that assurance stick for the sake of many of his own colleagues with seats in the south-east and the south-west, whose constituents may lose railways or, if not, may find that fares are very much higher than they are at present.
The Secretary of State also expressed horror that the taxpayer provides nearly as much in railway revenue as is provided through fares. All other countries accept that railways are essential and must receive substantial subsidy. They recognise, as the Secretary of State apparently does not, that the benefits in a more efficient total transportation system and the considerable environmental gain are worth paying for through general taxation. In any event, if the Secretary of State is so worried about a substantial subsidy to a single industry, he should read the book about agriculture published by his hon. Friend the Member for Holland with Boston (Mr. Body). His hon. Friend shows that agriculture is subsidised to the tune of 166 per cent. of farm incomes, yet the Secretary of State's Government plan to expand agriculture, not to kill it. I hope that the Secretary of State will take that point on board.
My constituency of Swindon owes its existence as a great town to the railways. Although its continuing existence is not threatened by closure or rundown, like other railway towns with workshops, nevertheless, it would be a considerable blow to railway workers in particular and the town in general if there were a further rundown and final closure of the workshops. The fear of closure was there before the Serpell report appeared. The fear now, since the report has been published, hits been heightened by the spectres raised in the report. The sense of insecurity is enhanced for those employed in the workshops, their families and the town itself. They feel betrayed, because over the past two years the work force in Swindon, like work forces throughout British Rail and BREL, has co-operated more than fully with management to make enormous improvements in productivity, getting rid of restrictive working practices and reducing unit costs to very competitive levels. They have done that over a long period of time. They now feel that their reward to be thrown into the dustbin with the railway itself. They are faced with this report which, if it were implemented, they believe would close many workshops, indeed perhaps all of them, and kill their jobs stone dead.
Rail workers at Swindon and elsewhere can be excused for blasting a report that suggests importing locomotives and other railway equipment at a time when there are 3½


million people unemployed and new redundancies are being announced every day. As the hon. Member for Chippenham (Mr. Needham) pointed out, the report affects not only railway workers but many other industries, one of which is in his constituency, as the railways buy 60 per cent. of their goods from private industry. Therefore, it is not only railway workers who are threatened by the report, but a whole range of workers throughout Britain. It is little wonder that my people in Swindon consider the writers of the Serpell report to be insensitive, cruel, out of touch and anti-British.
Britain needs the Serpell report like a hole in the head. What it really needs is an expansion of the railway system and recognition of the fact that, without a good railway system, our transportation policy will not be able to deal with any expansion in our economy and our environment will be completely ruined.
Britain has the opportunity to provide a good transportation system—a good railway system. It is no good believing that the railways can carry more goods if the branch lines are closed down. It is because of the closure of branch lines that we do not carry so many goods now. We cannot get railway wagons to the new localities where the factories are.
I sincerely hope that the House will vote for the Opposition's motion tonight and, furthermore, that when the Under-Secretary of State replies he will give the assurances that hon. Members have asked for.

Mr. Den Dover: I support the Serpell report, although we have heard much criticism of it. It says on page 5 that it does not concern itself
to any significant extent with the Board's non-railway activities".
I only wish that British Rail's management had done the same.
Two scare stories have been dismissed this evening. First, the Secretary of State has said that option A is not to be proceeded with, and, secondly, we have the chief inspector's report on safety in which it is said categorically that safety standards are high. That is not the widely held view of the public. Laymen such as myself believe the scare stories and sometimes travel in a state of anxiety.
I was most surprised to read that there was a lack of adequate management and comparative information. Surely a large management organisation such as British Rail needs such figures to be able to see whether it is performing efficiently. I am delighted that the report points the way to further manning reductions. When the members of the Select Committee on Transport visited Tyne and Wear Metro, I was astounded at how efficiently it was being run. There was one-man operation of the trains and certain stations were not manned at all. It was run sensibly and efficiently.
The report says that British Rail will find it impossible to make the inter-city service viable. I do not accept that. I am sure that with the best will in the world the Government and British Rail's management can make profits just as the National Bus Company has with its intercity service.
As an engineer I was most surprised to find that engineering expenditure is over 50 per cent. of all the costs in British Rail. Surely to goodness we should be selling

off or privatising some of those activities to reduce the total cost. The report says that there has been no competition in the provision of rails or concrete sleepers underneath the rails. That is amazing. We learn that the last tender from the private sector for rolling stock was in 1974. That surely cannot be accepted in today's world when we need efficiency and cost reductions.
We need value for money and must consider the alternative course. Should not we be replacing some of these small lines—the big losers—with buses? However, in my constituency there is the Ormskirk to Preston line, and I must emphasise that some roads do not run parallel to rails and it would be impossible to replace certain railway lines with roads.
There has been much press comment in the past few days about the need to reorganise, perhaps on a regional basis. Yet we read in the report that inter-city, London and the south-east, freight and provincial are separate in the management structure. Perhaps we need fewer managers. Surely if we can concentrate British Rail's resources, bring those into cost centres and shorten lines of communication, we could improve the performance.
British Rail can show the world what its engineering and enterprise can do. We have a great many electrification contracts all over the world. We lead the world in civil, mechanical and electrical engineering and we must continue to do so. Looking ahead, surely we can see the building of the Channel tunnel and some expansion of services.

Mr. Robert Hughes: The House will wish me, on behalf of the Opposition, to associate myself immediately with the sentiments of the hon. Member for Moray and Nairn (Mr. Pollock) concerning our anxiety for the casualties in the derailment that has taken place today at Llanbryde, near Folhabers in his constituency, and hope that there will be an early and full report on the circumstances.
We have had one of the most interesting and exciting debates on transport for a long time. It has been a remarkable debate because of the few friends that the Serpell committee report has had. Only one Member had anything good to say about it, and that was the Secretary of State.
It is difficult to pick out any particular speech among the many that have been made. At the cost of perhaps damaging his future, I commend the brave speech of the hon. Member for Christchurch and Lymington (Mr. Adley). Without doubt, the most disappointed man in the country is Sir Peter Parker, the chairman of British Rail. He more than anyone else lobbied assiduously and with great tenacity to have the committee set up to inquire into British Rail's finances. The nature, style and content of the report must be galling to him because he believed that the report would be a catalyst to produce a chain reaction that would galvanise the Secretary of State for Transport into obtaining and releasing the long overdue and vital investment in British Rail. Alas, instead of a catalyst the Serpell committee report is an inhibitor which will confine the Secretary of State for Transport in his customary role and state of indecision.
The report has effects that go well beyond the railway industry which, in my view, will suffer from investment blight. I shall seek to show later that that investment blight


will affect not just the present and the future of the railway system but everyone connected with the railways or those communities served by them.
I come to the curious matter of the cost of the report and how it is made up. In a parliamentary answer I was told that until 31 January it had cost £610,000 of which £550,000 was paid to two consultant firms. Peat, Marwick and Mitchell were paid £182,000 and £370,000 went to R. Travers Morgan and Partners. I find it astonishing that Mr. Butler and Mr. Goldstein, senior partners in those two companies respectively, were members of the committee.
We are advised that their interest in the companies was well known and that, therefore, there was no need for a declaration of interest. We were told also that the payments were above board and within the rules governing payments to consultants. Be that as it may, I invite the House to consider the reaction had the leader of a Labour council appointed a friend of a friend to a committee to look into part of the council's finances, and then given his company a contract worth a tenth of this sum to do the work without the contract going to tender. The Fleet Street tabloids would have found it difficult to get a big enough type face to fill the page shouting "Scandal, Corruption". There would have been calls for Scotland Yard to investigate the awards of the contracts. The Times and The Daily Telegraph would have pontificated in leaders and centre page articles about the necessity for financial probity and integrity when public money is being spent. The Prime Minister at her most shrill and harridan-like would have denounced such profligacy with taxpayers' money.
In this case, however, we are told that everything is in order and that it is all within the rules. If that is so, it is high time that the rules were toughened up. The Public Accounts Committee has a duty to examine seriously, not only these contracts, but the whole question of how contracts are issued, because they involve very big money. On 20 January, I was told that the total fees and expenses paid to consultants by the Department of Transport in relation to motorway and trunk road schemes alone was £12·7 million in 1979–80. For 1982–83, the amount to be spent on consultants is forecast at £43·6 million. The Government are cutting the Civil Service, but the money is simply being spent on consultants instead. This is a serious matter and it should be investigated.
If any stigma attaches to such large sums having been received, it falls not on the two men involved but on the Secretary of State. In this case, the relationship between the Prime Minister, Professor Walters and Mr. Goldstein may have been such that there is now too cosy a connection with the Department of Transport. If that is so, something should be done about it.
More important in many ways than the integrity or prejudice of the individuals concerned is the way in which the independence and objectivity of the report itself has been totally prejudiced. I concede at once that the Secretary of State has the right to appoint consultants to examine any aspect of British Rail finances, but the matter should be properly tendered according to the rules. The Secretary of State is entitled to ask for a consultant's report, but he is not entitled to put senior members of the consultancy firms involved on the committee of inquiry and then pretend that it has given objective advice. We must be particularly concerned to ensure independence and objectivity, especially as the report is so negative and hostile to the railway industry.
The inadequacy of the report both in its general approach and in its conclusions is exemplified in its treatment of British Rail Engineering Ltd. No one doubts that the workshops face a lean future. Many of my hon. Friends have raised this in the debate and my hon. Friend the Member for Westhoughton (Mr. Stott) has fought as hard as anyone, with a constructive approach, for r decent future for his constituents at the Horwich works. We know that there are problems, but the report produces only negative options with no supporting evidence. The report states clearly on page 40:
We have not attempted to estimate the costs of implementing these options, or their relative costs and benefits.
People's livelihoods are at stake, yet options are proposed without any consideration of costs.
The committee should have adopted a constructive approach. It should have recognised that there are first-class assets in BREL. There is capital equipment and machinery of real quality and a highly skilled and well trained labour force. Having recognised the expertise available, the committee should have considered how those assets could be used in the best interests of British Rail and of the nation.
Oddly enough, this is the only part of the report that takes account of any international comparisons. Astonishingly, it did not look positively at international business prospects, which are important. There are large areas of the under-developed world with a great need to develop transport services. Given the large distances involved in many of these countries, railway development is a major attraction.
The South African development co-ordinating conference has identified transport as of major importance and of the highest priority. I welcome the announcement today by the Secretary of State that an order has been won from French-speaking Africa. He did not give any details, but I am glad that this has happened.
The machinery of Government should be put in motion in full by consultations between BREL, the Minister for Overseas Development, the Secretary of State for Transport and the Foreign Office to identify the needs of transport development overseas and to maximise the potential orders for BREL. Such a process would bring together both our interests and the interests of developing countries to our mutual benefit. The Secretary of State seems to favour that approach, and I hope that he will give a guarantee through the Under-Secretary that he will retain the BREL workshop capacity to meet these objectives in the future.
The main part of the report concerns the network options, and I am interested in the Government's response. Inevitably, there has been a major discussion on the extreme option of reducing the network to a core of about 1,630 route miles serving only Glasgow and Edinburgh, Cardiff and Bristol, Bournemouth, Brighton, Dover, Norwich and Newcastle. Such a reduction, which would be a cut of 84 per cent. of the present mileage, would leave Scotland with vast tracts without any railway, most of the west country with no railway, and precious little left in the rest of England.
The Secretary of State defends the report by explaining that these are simply illustrative options—they would not sell in Sotheby's whatever else they might do. The Government have reportedly ruled out the extreme options with the most massive cuts. However, the difficulty with


the Secretary of State is that he undermines these reports by his answers, if one reads Hansard and the replies to the questions on his statement.
In c. 495, on 20 January, in answer to his hon. Friend the Member for Faversham (Mr. Moate), and in c. 499, in answer to the hon. Member for Dumfries (Sir H. Monro), the Secretary to State said that the Government would not wish to travel down the road of extreme options without the fullest public debate and without making a conscious decision. That is not much good. The Government do not wish to go down the road until they have discussed the matter and made their minds up. By saying that, the Secretary of State undermines his reassurances.
There was then the Secretary of State's curious answer to the hon. Member for Moray and Nairn. I hope that the hon. Member will not mind my taking him gently to task. Here we have a report in which two, at least, of the options suggest Scotland should have no internal railway system. Faced with that, one would have thought that the hon. Member would have set his sights a little higher than his concern with the railway line that happens to pass through his consitutuency. Perhaps in a sense he deserved the ignominy of the answer that he received, which reduced the status of the Aberdeen-Inverness line to that of a branch line. The answer reads:
I cannot stand here, … and guarantee the future of every branch line for all time."—[Official Report, 20 January 1983; Vol. 35, c. 497.]
If the Parliamentary Private Secretary to the Secretary of State for Scotland, described in one of the newspapers as a "senior Government Back Bencher", is treated with such cavalier disregard, every hon. Member with a railway running through his constituency must have felt a chill run down his spine.
The Secretary of State cropped up on "Panorama" and, despite repeated questioning by Vincent Hanna, he again refused to repudiate the extreme options. On that occasion he was at his most equivocal. He said that every option needed to be considered and was valuable to the discussion. What better opportunity is there than today to put all our minds at rest?
So what did the Secretary of State say today? The only option that he ruled out was option A. He was specifically asked to rule out the options. He said that, of course, option A is out of the window. However, option B is still on the agenda, and option B is really option A plus some more commuter lines in London and the south-east. That would leave us with only 2,200 route miles.
The immediate danger that Serpell leads us into is investment blight. Until a firm decision is taken on the size of the network, investment planning in British Rail cannot make any sense. There will, therefore, be a further slowing down of investment, which sadly has declined in recent years and months.
Moreover, British Rail cannot seek to expand its services by looking for new business, because much of the current sales approach of BR—certainly in terms of freight—is to try to obtain long-term contracts, often through lease-back arrangements of privately owned wagons, and by trying to persuade companies to set up private sidings with section 8 grants. That approach cannot work as long as there is a threat hanging over so many parts of the railway system.
Secondly, investment that is needed for companies in various communities currently served by railway lines will be under question, and may be held back, certainly as long as closure threats remain. That is another case of investment blight.
Thirdly, communities will not be able to attract new industry to their areas. One aspect that often sells an area to a new investor is the availability of a railway line and the possibility of sidings. That is not possible while threats of closure remain. It is another example of investment blight. The Secretary of State must do something about that.
Those who welcomed the appointment of the Serpell committee had hoped that the years between now and the end of the century would be charted with a reasonable degree of certainty so that there could be sensible planning. This report produces the very antithesis of central planning. It will destroy initiative, inventiveness in railway planning and management. The Secretary of State should immediately repudiate the report. He should tell us immediately what size he wants the network to be. He should begin immediately to discuss future investment with British Rail.
The fatal flaw in the report is identified by the committee in paragraph 5 of its own introduction on page 5. It says:
While we have paid close attention to the evidence,"—
I would hope that they would pay close attention to the evidence—
we have not by any means addressed all the issues raised with us. This is mainly because our review has been concerned with the railway's finances, not transport policy".
I repeat and re-emphasise:
our review has been concerned with the railway's finances, not transport policy".
That is the fatal flaw, not only of the committee but of the Government, and the Secretary of State in particular. Transport policy is the furthest thing from his mind. He is stuck in the rut, simply concerned with finance. All that matters is finance. Public service and the needs of the community are foreign concepts to the Government. The Serpell committee simply reflects Government thinking. Its report should be totally rejected in favour of Labour's approach for investment in public service. I commend our motion to the House.

The Under-Secretary of State for Transport (Mr. Reginald Eyre): The Government have been glad of the opportunity provided by the debate. It allows us to put the record straight on a number of misconceptions and unnecessary scares. It allows us to begin to set an agenda for future debate and consideration. That debate must be about not only the important issues raised by Serpell but the whole future and role of the railway.
I fear that the Opposition are not interested in an open and wide-ranging debate. Their motion shows that they are not as a whole prepared to reflect on the problems and opportunities of the railway. The right hon. Member for Barrow-in-Furness (Mr. Booth) and the hon. Members for Derby, South (Mr. Johnson) and Carlisle (Mr. Lewis) preferred to enter into root and branch opposition to the possibility of change. One can understand the emotional feeling of lifetime railwaymen such as the hon. Members for Carlisle and Derby, South. However, the views that they expressed are not in the best interests of present and


future railwaymen. My hon. Friend the Member for Peterborough (Dr. Mawhinney) showed considerable understanding in referring to that aspect.
Serpell forces us to face up to some difficult but unavoidable issues. We serve no one's interests by sticking our heads in the sand or letting emotion overcome reason and calm study of the problems. Therefore, it saddened me more than anything else to hear the blinkered response of the right hon. Member for Barrow-in-Furness and, I am sorry to say, of the hon. Member for Aberdeen, North (Mr. Hughes). Living in the past is no way to achieve an improved service for the travelling public and better value for taxpayers. The arguments that they used boiled down essentially to the demand for more public money, almost irrespective of the use made of it, British Rail's performance, value for money or the legitimate interests of the taxpayer.
The right hon. Gentleman and others, including, unfortunately, the hon. Member for Nuneaton (Mr. Huckfield), and also, less surprisingly, the hon. Member for Caernarvon (Mr. Wigley), referred to the unjustified scare stories of which they have made so much in recent weeks. We have heard all sorts of suggestions about the network. We must not jump to conclusions or make snap judgments. The options in the report are illustrations only. They are not the Government's options, nor their only choices. Still less are they conclusions. They are not even a basis for decisions. [HON. MEMBERS: "Hear, hear".] Nor were they intended as such. Their value is to stimulate informed public debate on the costs and efficiency of this form of public transport. We want to hear the arguments and have the debate before we even consider conclusions.
My hon. Friend the Member for Faversham (Mr. Moate) said in his strong speech, with which I agreed very much, that it is the task of Ministers and of Parliament to decide policies.
I repeat the assurances given by my right hon. Friend the Secretary of State earlier in the debate. The extreme illustrations are ruled out. The Government want a good, modern and economic railway that meets the requirements of the travelling public and of its freight customers.

Mr. Whitehead: Which of the extreme options are ruled out? Will only options A and B be ruled out, or will option C3, which cuts 40 per cent. out of the network, also
be ruled out?

Mr. Eyre: I must emphasise to the hon. Gentleman, because right hon. and hon. Members of the Opposition are deliberately misunderstanding this, that there are no proposals for closure before the Government or before the House. The options that are referred to in the report are illustrative only and subject to all the qualifications that I have spelt out.
We cannot altogether rule out consideration of change to achieve that objective. I want to take the example of bus substitution, to which my hon. Friend the Member for Wellingborough (Mr. Fry) referred. From the way in which that suggestion has been greeted in some quarters, one would never guess that it had been proposed by British Rail itself, by the former Select Committee on Nationalised Industries and, come to that, in the White Paper on transport policy put out by the Labour Government. I was very interested to hear the support which the right hon. Member for Norwich, North (Mr. Ennals) gave to the proposal and all the safeguards which would have to be given serious consideration.

Mr. Booth: I understand the Under-Secretary of State to say that certain of the options in the Serpell report are ruled out by the Government. Will he tell us which of the options are ruled out?

Mr. Eyre: I made it perfectly clear that they are illustrative options and that their purpose is merely to stimulate debate. That was their intention and they have undoubtedly succeeded in doing that.
I was pleased to hear the reference by the right hon. Member for Stockton (Mr. Rodgers) and by my hon. Friend the Member for Christchurch and Lymington (Mr. Adley) to certain aspects of privatisation, including private catering.

Mr. Adley: Can my hon. Friend confirm that it is the Government's policy to maintain the rail network more or less at its present size? Is my understanding correct?

Mr. Eyre: My hon. Friend knows that my right hon. Friend has often said that that is the basic position, but he has had to accompany it with the qualification that one must take account of the circumstances which apply in different parts of the country. Those are illustrated in the report. The situation could not be regarded as absolutely set in aspic. The discussion about the possibility of bus substitution illustrates the point I am making. It sets the debate in perspective, if right hon. and hon. Members would not get so emotional about it.
I emphasise that no snap decisions will be taken with regard to the network. Nor can the network be looked at in a vacuum. There are wider regional and social aspects. The network cannot be determined independently of British Rail's performance and the response to other objectives of policy. Nor can it be considered in isolation from what customers want and are willing to use. What we want to avoid, as my right hon. Friend the Member for Worthing (Mr. Higgins) has wisely demonstrated, is the belief that there must be no discussion, no debate and no possibility of change in regard to bus substitution irrespective of circumstances, needs or costs.

Mr. Roger Stott: The Minister says that no snap decisions are about to be taken. I take it that the ruling out of the extreme options A and H is not a snap decision. Will the Minister say whether option B is a snap decision? How do the Government view option B? That is the most critical decision he has to make.

Mr. Eyre: I repeat that no snap decisions and no closure proposals are before us. The options in the report are merely illuminatory—[Interruption.]—and their purpose is to stimulate debate.
I wish to deal with fares. It has been alleged that there will be a 40 per cent. rise in fares for commuters. That is nonsense. Nowhere in the report is it suggested. There are no recommendations on fares in the report. The committee stated that fares—[Interruption.]

Mr. Speaker: Order. I think that the House is being unfair. I want to listen to the Minister.

Mr. Eyre: I am grateful, Mr. Speaker.
The committee stated that fares and particularly the size of discounts given to season ticketholders were a subject for discussion. It also, to be fair, pointed to the possible effects on congestion. Mr. Goldstein said that
it would in my view be wrong to go forward with other than modest increases without undertaking a very far reaching examination.


I can assure the House that there will be no sudden big increases in rail fares. The main way to achieve sustainable fares at reasonable levels must be by cutting costs.
My hon. Friend the Member for Moray and Nairn (Mr. Pollock) has reported upon the tragic accident today in his constituency. My right hon. Friend and I would like to offer our sympathy to those involved in the accident. I can assure my hon. Friend that a public inquiry will be held into the cause of the accident.
Safety is paramount. The committee has in no way suggested that it should be compromised. [HON. MEMBERS: "It has."]. I assure hon. Members, including the right hon. and learned Member for Aberavon (Mr. Morris) and the hon. Member for Isle of Wight (Mr. Ross), that we would not countenance any increase in danger to travellers or to rail staff. The points that have been made on this subject will be carefully borne in mind. My hon. Friend the Member for Chorley (Mr. Dover) made an important point when he said that the chief inspecting officer told Serpell that he had received firm assurances from the board that safety would not be prejudiced on any part of the system.
Hon. Members have argued in this debate, as in the past, that the solution to the railway problem is more investment. It is not true to say that the costs of the railway could be totally transformed if only there was more investment in equipment. This is emphasised by the desperately frustrating situation affecting the Bedford-St. Pancras service. Vast amounts of investment have gone into the railways in recent years—well over £3 billion at current price levels since 1975 alone. Even last year, at a time of particular severe financial difficulty for it, the board invested more than £350 million in its activities.
The Government have not limited British Rail investment. Shortage of funds during the past year or two, in spite of record levels of public support by way of grant and including the EFL arrangements, has stemmed from the inability to improve efficiency and to cut costs when traffic has fallen away during a world recession, together with losses incurred due to industrial disputes.
As my right hon. Friend said, and looking to the future, British Rail now foresees scope for an increase in investment within its external financing limit. It has removed the moratorium on new investment that it imposed last year. That is welcome news. I hope that it will be able to take note of the committee's view that emphasis should be given to investment offering cost savings and early returns. Priorities should include improving facilities for customers and passengers. The aim must be a better deal for passengers, users and taxpayers.
Many hon. Members, especially the hon. Member for Swindon (Mr. Stoddart), have expressed concern about the future of British Rail Engineering Ltd. It has been clear for some time that British Rail faces big problems with British Rail Engineering Ltd. Those problems arise in large part from the undoubted fact that BREL has excess capacity. This excess capacity is very costly. It must be dealt with, and BR is already seeking to take action.
All those questions need further investigation. I fully recognise the deep concern that has been expressed today,

but the best guarantee for jobs is for our suppliers to be able to meet demand at home and overseas at the right price and quality.
There is at present too much capacity worldwide in the railway supply industry. There is intense competition for orders. I am, therefore, very pleased to announce that yesterday BREL, with Government support, signed a contract to supply 115 wagons and 36 coaches, worth in total £23 million, to the Congo. BREL has obtained £75 million worth of export work in the past 12 months. I wish the company every success in its future attempts to obtain similar work.
The real task of the House now, as well as of the Government, British Rail and, indeed, the country at large, is to look to the future in a constructive spirit and address themselves to the key questions of the kind of railway we need and can afford and how to achieve it.
A central theme of the report, in the section on engineering and planning, for the future is efficiency. There is an undeniable case for improving matters. British Rail is working on improvements. I gladly recognise, as did my right hon. Friend, all it has done. More needs to be done, as British Rail recognises. British Rail wants to see better value for money for the customer and the taxpayer. It also recognises that the services provided by British Rail must be better related to the customer's requirements. Not all the suggestions made and opportunities identified by the committee in its report may be right, but none of them can be ignored. The chairman of the board, Sir Peter Parker, sees many constructive points in the report. In those circumstances, how can the Opposition's root and branch opposition be right or responsible?
We have not reached instant conclusions, nor will we come to hasty judgments. The House and the country should be clear about the Government's general objectives and attitudes to the railway. We want a modern railway, with a good, long-term future, playing its proper part in the transport system. Nobody can guarantee that role. It depends on the railway being run efficiently and achieving cost savings while maintaining safety; it depends on the railway being attuned to the demands of its customers, with a businesslike approach; and it depends on the railway giving value for money to both taxpayers and fare-paying travellers.
Those aims will not be achieved without fresh attitudes, new ideas and innovation—the lifeblood of any successful organisation. Serpell helps to provide some of the ideas. Sir Peter Parker himself said that the report contained "many constructive points". On that basis, I urge the House to accept the Government amendment and to reject the Opposition's motion.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 250, Noes 294.

Division No. 60]
[10 pm


AYES


Abse, Leo
Barnett, Guy (Greenwich)


Adams, Allen
Barnett, Rt Hon Joel (H'wd)


Allaun, Frank
Beith, A. J.


Alton, David
Benn, Rt Hon Tony


Anderson, Donald
Bennett, Andrew (St'kp't N)


Archer, Rt Hon Peter
Bidwell, Sydney


Ashley, Rt Hon Jack
Booth, Rt Hon Albert


Ashton, Joe
Boothroyd, Miss Betty


Atkinson, N.(H'gey,)
Bottomley, Rt Hon A. (M'b'ro)


Bagier, Gordon A.T.
Bradley, Tom






Bray, Dr Jeremy
Healey, Rt Hon Denis


Brocklebank-Fowler, C.
Heffer, Eric S.


Brown, Hugh D. (Provan)
Hogg, N. (E Dunb't'nshire)


Brown, R. C. (N'castle W)
Holland, S. (L'b'th, Vauxh'll)


Brown, Ronald W. (H'ckn'y S)
Home Robertson, John


Brown, Ron (E'burgh, Leith)
Homewood, William


Buchan, Norman
Howell, Rt Hon D.


Callaghan, Rt Hon J.
Howells, Geraint


Callaghan, Jim (Midd't'n &amp; P)
Hoyle, Douglas


Campbell, Ian
Huckfield, Les


Campbell-Savours, Dale
Hudson Davies, Gwilym E.


Cant, R. B.
Hughes, Robert (Aberdeen N)


Carmichael, Neil
Hughes, Roy (Newport)


Carter-Jones, Lewis
Jay, Rt Hon Douglas


Cartwright, John
Jenkins, Rt Hon Roy (Hillh'd)


Clark, Dr David (S Shields)
John, Brynmor


Clarke, Thomas (C'b'dge, A'rie)
Johnson, James (Hull West)


Cocks, Rt Hon M. (B'stol S)
Johnson, Walter (Derby S)


Cohen, Stanley
Johnston, Russell (Inverness)


Coleman, Donald
Jones, Rt Hon Alec (Rh'dda)


Conlan, Bernard
Jones, Barry (East Flint)


Cook, Robin F.
Jones, Dan (Burnley)


Cox, T. (W'dsw'th, Toot'g)
Kaufman, Rt Hon Gerald


Crawshaw, Richard
Kerr, Russell


Crowther, Stan
Kilroy-Silk, Robert


Cryer, Bob
Lambie, David


Cunliffe, Lawrence
Lamond, James


Cunningham, G. (Islington S)
Leadbitter, Ted


Cunningham, Dr J. (W'h'n)
Leighton, Ronald


Dalyell, Tam
Lestor, Miss Joan


Davidson, Arthur
Lewis, Arthur (N'ham NW)


Davies, Rt Hon Denzil (L'lli)
Lewis, Ron (Carlisle)


Davis, Clinton (Hackney C)
Litherland, Robert


Davis, Terry (B'ham, Stechf'd)
Lofthouse, Geoffrey


Deakins, Eric
Lyon, Alexander (York)


Dean, Joseph (Leeds West)
Lyons, Edward (Bradf'd W)


Dewar, Donald
Mabon, Rt Hon Dr J, Dickson


Dixon, Donald
McCartney, Hugh


Dobson, Frank
McDonald, Dr Oonagh


Dormand, Jack
McElhone, Mrs Helen


Dubs, Alfred
McGuire, Michael (Ince)


Duffy, A. E. P.
McKelvey, William


Dunnett, Jack
MacKenzie, Rt Hon Gregor


Dunwoody, Hon Mrs G.
Maclennan, Robert


Eadie, Alex
McNally, Thomas


Eastham, Ken
McTaggart, Robert


Edwards, R. (W'hampt'n S E)
McWilliam, John


Ellis, R. (NE D'bysh're)
Magee, Bryan


Ellis, Tom (Wrexham)
Marks, Kenneth


English, Michael
Marshall, D (G'gow S'ton)


Ennals, Rt Hon David
Marshall, Dr Edmund (Goole)


Evans, Ioan (Aberdare)
Marshall, Jim (Leicester S)


Evans, John (Newton)
Martin, M (G'gow S'burn)


Ewing, Harry
Mason, Rt Hon Roy


Faulds, Andrew
Maxton, John


Field, Frank
Maynard, Miss Joan


Fitch, Alan
Meacher, Michael


Flannery, Martin
Mikardo, Ian


Foot, Rt Hon Michael
Millan, Rt Hon Bruce


Forrester, John
Miller, Dr M. S. (E Kilbride)


Foster, Derek
Morris, Rt Hon A. (W'shawe)


Fraser, J. (Lamb'th, N'w'd)
Morris, Rt Hon C. (O'shaw)


Freeson, Rt Hon Reginald
Morris, Rt Hon J. (Aberavon)


Freud, Clement
Morton, George


Garrett, John (Norwich S)
Moyle, Rt Hon Roland


Garrett, W. E. (Wallsend)
Newens, Stanley


George, Bruce
Oakes, Rt Hon Gordon


Ginsburg, David
Ogden, Eric


Golding, John
O'Neill, Martin


Graham, Ted
Orme, Rt Hon Stanley


Grant, John (Islington C)
Owen, Rt Hon Dr David


Grimond, Rt Hon J.
Paisley, Rev Ian


Hamilton, James (Bothwell)
Park, George


Hamilton, W. W. (C'tral Fife)
Parker, John


Hardy, Peter
Parry, Robert


Harman, Harriet (Peckham)
Pavitt, Laurie


Harrison, Rt Hon Walter
Pendry, Tom


Hart, Rt Hon Dame Judith
Penhaligon, David


Hattersley, Rt Hon Roy
Pitt, William Henry


Haynes, Frank
Powell, Raymond (Ogmore)





Prescott, John
Stoddart, David


Price, C. (Lewisham W)
Stott, Roger


Race, Reg
Strang, Gavin


Radice, Giles
Straw, Jack


Rees, Rt Hon M (Leeds S)
Summerskill, Hon Dr Shirley


Richardson, Jo
Taylor, Mrs Ann (Bolton W)


Roberts, Albert (Normanton)
Thomas, Jeffrey (Abertillery)


Roberts, Allan (Bootle)
Thomas, Mike (Newcastle E)


Roberts, Ernest (Hackney N)
Thomas, Dr R. (Carmarthen)


Roberts, Gwilym (Cannock)
Thorne, Stan (Preston South


Robertson, George
Tilley, John


Robinson, G. (Coventry NW)
Tinn, James


Robinson, P. (Belfast E)
Torney, Tom


Rodgers, Rt Hon William
Varley, Rt Hon Eric G.


Rooker, J. W.
Walker, Rt Hon H. (D'caster)


Roper, John
Wardell, Gareth


Ross, Ernest (Dundee West)
Watkins, David


Ross, Stephen (Isle of Wight)
Weetch, Ken


Rowlands, Ted
Wellbeloved, James


Ryman, John
Welsh, Michael


Sandelson, Neville
White, J. (G'gow Pollok)


Sever, John
Whitehead, Phillip


Sheerman, Barry
Whitlock, William


Sheldon, Rt Hon R.
Wigley, Dafydd


Shore, Rt Hon Peter
Willey, Rt Hon Frederick


Short, Mrs Renée
Williams, Rt Hon A. (S'sea W)


Silkin, Rt Hon J. (Deptford)
Williams, Rt Hon Mrs (Crosby)


Silkin, Rt Hon S. C (Dulwich)
Wilson, Gordon (Dundee E)


Silverman, Julius
Wilson, William (C'try SE)


Skinner, Dennis
Winnick, David


Smith, Rt Hon J. (N Lanark)
Woodall, Alec


Snape, Peter
Woolmer, Kenneth


Spellar, John Francis (B'ham)
Young, David (Bolton E)


Spriggs, Leslie



Stallard, A. W.
Tellers for the Ayes:


Steel, Rt Hon David
Mr. Harry Cowans and


Stewart, Rt Hon D. (W Isles)
Mr. Allen McKay.


NOES


Aitken, Jonathan
Carlisle, John (Luton West)


Alexander, Richard
Carlisle, Kenneth (Lincoln)


Alison, Rt Hon Michael
Carlisle, Rt Hon M. (R'c'n)


Amery, Rt Hon Julian
Chalker, Mrs. Lynda


Ancram, Michael
Channon, Rt. Hon. Paul


Arnold, Tom
Chapman, Sydney


Aspinwall, Jack
Churchill, W. S.


Atkins, Rt Hon H. (S'thorne)
Clark, Hon A. (Plym'th, S'n)


Atkins, Robert (Preston N)
Clark, Sir W. (Croydon S)


Atkinson, David (B'm'th, E)
Clegg, Sir Walter


Baker, Kenneth (St. M'bone)
Cockeram, Eric


Baker, Nicholas (N Dorset)
Colvin, Michael


Bendall, Vivian
Cope, John


Benyon, Thomas (A'don)
Corrie, John


Benyon, W. (Buckingham)
Costain, Sir Albert


Best, Keith
Cranborne, Viscount


Bevan, David Gilroy
Critchley, Julian


Biffen, Rt Hon John
Crouch, David


Biggs-Davison, Sir John
Dickens, Geoffrey


Blackburn, John
Dorrell, Stephen


Blaker, Peter
Douglas-Hamilton, Lord J.


Body, Richard
Dover, Denshore


Bonsor, Sir Nicholas
du Cann, Rt Hon Edward


Boscawen, Hon Robert
Dunn, Robert (Dartford)


Bottomley, Peter (W'wich W)
Durant, Tony


Bowden, Andrew
Eden, Rt Hon Sir John


Boyson, Dr Rhodes
Eggar, Tim


Braine, Sir Bernard
Elliott, Sir William


Brinton, Tim
Emery, Sir Peter


Brittan, Rt. Hon. Leon
Eyre, Reginald


Brooke, Hon Peter
Fairbairn, Nicholas


Brotherton, Michael
Fairgrieve, Sir Russell


Browne, John (Winchester)
Faith, Mrs Sheila


Bruce-Gardyne, John
Farr, John


Bryan, Sir Paul
Fell, Sir Anthony


Buchanan-Smith, Rt. Hon. A.
Fenner, Mrs Peggy


Buck, Antony
Finsberg, Geoffrey


Budgen, Nick
Fisher, Sir Nigel


Bulmer, Esmond
Fletcher, A. (Ed'nb'gh N)


Butcher, John
Fletcher-Cooke, Sir Charles


Butler, Hon Adam
Forman, Nigel






Fowler, Rt Hon Norman
Lang, Ian


Fox, Marcus
Langford-Holt, Sir John


Fraser, Rt Hon Sir Hugh
Latham, Michael


Fraser, Peter (South Angus)
Lawrence, Ivan


Fry, Peter
Lawson, Rt Hon Nigel


Gardiner, George (Reigate)
Lee, John


Gardner, Sir Edward
Le Marchant, Spencer


Garel-Jones, Tristan
Lennox-Boyd, Hon Mark


Gilmour, Rt Hon Sir Ian
Lewis, Sir Kenneth (Rutland)


Goodhart, Sir Philip
Lloyd, Ian (Havant &amp; W'loo)


Goodhew, Sir Victor
Lloyd, Peter (Fareham)


Goodlad, Alastair
Loveridge, John


Gorst, John
Luce, Richard


Gow, Ian
Lyell, Nicholas


Gower, Sir Raymond
McCrindle, Robert


Grant, Sir Anthony
Macfarlane, Neil


Gray, Rt Hon Hamish
MacGregor, John


Greenway, Harry
MacKay, John (Argyll)


Grieve, Percy
Macmillan, Rt Hon M.


Griffiths, Peter (Portsm'th N)
McNair-Wilson, M. (N'bury)


Grist, Ian
McNair-Wilson, P. (New F'st)


Grylls, Michael
McQuarrie, Albert


Gummer, John Selwyn
Madel, David


Hamilton, Hon A.
Major, John


Hamilton, Michael (Salisbury)
Marland, Paul


Hampson, Dr Keith
Marlow, Antony


Hannam, John
Marshall, Michael (Arundel)


Haselhurst, Alan
Marten, Rt Hon Neil


Hastings, Stephen
Mates, Michael


Havers, Rt Hon Sir Michael
Maude, Rt Hon Sir Angus


Hawkins, Sir Paul
Mawby, Ray


Hawksley, Warren
Mawhinney, Dr Brian


Hayhoe, Barney
Maxwell-Hyslop, Robin


Heath, Rt Hon Edward
Mayhew, Patrick


Heddle, John
Mellor, David


Henderson, Barry
Meyer, Sir Anthony


Heseltine, Rt Hon Michael
Miller, Hal (B'grove)


Hicks, Robert
Mills, Iain (Meriden)


Higgins, Rt Hon Terence L.
Mills, Sir Peter (West Devon)


Hill, James
Miscampbell, Norman


Hogg, Hon Douglas (Gr'th'm)
Mitchell, David (Basingstoke)


Holland, Philip (Carlton)
Moate, Roger


Hooson, Tom
Monro, Sir Hector


Hordern, Peter
Montgomery, Fergus


Howe, Rt Hon Sir Geoffrey
Moore, John


Howell, Rt Hon D. (G'ldf'd)
Morgan, Geraint


Howell, Ralph (N Norfolk)
Morris, M. (N'hampton S)


Hunt, David (Wirral)
Morrison, Hon C. (Devizes)


Hunt, John (Ravensbourne)
Murphy, Christopher


Hurd, Rt Hon Douglas
Myles, David


Irvine, Rt Hon Bryant Godman
Neale, Gerrard


Irving, Charles (Cheltenham)
Needham, Richard


Jenkin, Rt Hon Patrick
Nelson, Anthony


Jessel, Toby
Neubert, Michael


Johnson Smith, Sir Geoffrey
Newton, Tony


Jopling, Rt Hon Michael
Nott, Rt Hon Sir John


Joseph, Rt Hon Sir Keith
Oppenheim, Rt Hon Mrs S.


Kaberry, Sir Donald
Osborn, John


Kellett-Bowman, Mrs Elaine
Page, John (Harrow, West)


Kimball, Sir Marcus
Page, Richard (SW Herts)


King, Rt Hon Tom
Parkinson, Rt Hon Cecil


Knight, Mrs Jill
Parris, Matthew


Knox, David
Patten, Christopher (Bath)





Patten, John (Oxford)
Stanley, John


Pattie, Geoffrey
Steen, Anthony


Pawsey, James
Stevens, Martin


Percival, Sir Ian
Stewart, A. (E Renfrewshire)


Peyton, Rt Hon John
Stewart, Ian (Hitchin)


Pink, R. Bonner
Stokes, John


Pollock, Alexander
Stradling Thomas, J.


Porter, Barry
Tapsell, Peter


Prentice, Rt Hon Reg
Tebbit, Rt Hon Norman


Price, Sir David (Eastleigh)
Temple-Morris, Peter


Prior, Rt Hon James
Thomas, Rt Hon Peter


Proctor, K. Harvey
Thompson, Donald


Pym, Rt Hon Francis
Townend, John (Bridlington)


Rees, Peter (Dover and Deal)
Trippier, David


Rees-Davies, W. R.
Trotter, Neville


Renton, Tim
van Straubenzee, Sir W.


Rhodes James, Robert
Vaughan, Dr Gerard


Rhys Williams, Sir Brandon
Viggers, Peter


Ridley, Rt Hon Nicholas
Waddington, David


Rifkind, Malcolm
Wakeham, John


Rippon, Rt Hon Geoffrey
Waldegrave, Hon William


Roberts, Wyn (Conway)
Walker, B. (Perth)


Rossi, Hugh
Walker-Smith, Rt Hon Sir D.


Rost, Peter
Waller, Gary


Rumbold, Mrs A. C. R.
Walters, Dennis


St. John-Stevas, Rt Hon N.
Ward, John


Scott, Nicholas
Warren, Kenneth


Shaw, Giles (Pudsey)
Watson, John


Shaw, Sir Michael (Scarb')
Wells, Bowen


Shelton, William (Streatham)
Wells, John (Maidstone)


Shepherd, Colin (Hereford)
Wheeler, John


Shepherd, Richard
Whitelaw, Rt Hon William


Shersby, Michael
Whitney, Raymond


Silvester, Fred
Wickenden, Keith


Skeet, T. H. H.
Wiggin, Jerry


Smith, Sir Dudley
Wilkinson, John


Smith, Tim (Beaconsfield)
Williams, D. (Montgomery)


Speller, Tony
Winterton, Nicholas


Spence, John
Wolfson, Mark


Spicer, Jim (West Dorset)
Young, Sir George (Acton)


Spicer, Michael (S Worcs)
Younger, Rt Hon George


Sproat, Iain



Squire, Robin
Tellers for the Noes:


Stainton, Keith
Mr. Carol Mather and


Stanbrook, Ivor
Mr. Anthony Berry.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 32 (Questions on amendments), and agreed to.

Mr. Speaker: forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House welcomes the opportunities, following the Serpell Report, for informed debate about how to achieve a better deal for both the rail customer and taxpayer, and how to cut costs and raise efficiency and establish a clear and positive direction for the railway's future for those it serves and those who work within it.

Consumer Protection

Mr. John Fraser: I beg to move,
That an humble Address be presented to Her Majesty, praying that the Supply of Services (Exclusion of Implied Terms) Order 1982 (S.I., 1982, No. 1771), dated 8th December 1982, a copy of which was laid before this House on 15th December, be annulled.
It is important that the prayer is discussed, because it is unusual that a Minister should, by statutory instrument—especially one under the negative procedure—exempt private individuals from civil liability. I do not object to the procedure, but it is unusual to exempt someone from liability for tort by statutory instrument. It is, therefore, important that the House should discuss these matters even if there is no vote.
I congratulate the draftsman of the statutory instrument on its clarity. Some statutory instruments are not phrased in the clearest possible language. When I was a Minister, I sometimes found that it was not easy to get civil servants or draftsmen to draft an explanatory memorandum so that it explained the purpose of the statutory instrument.
It is a short statutory instrument, and it is phrased in such a way that on reading the second article we can instantly understand exactly what it is intended to do. That is a matter for congratulation, and I hope that that precedent is followed. A statutory instrument from the Department of Trade, especially one dealing with consumer credit, does not make the easiest of reading, even for those practised at it.
My criticism and comments fall into three parts. The statutory instrument exempts from the implied liability to carry out the service with reasonable care and skill
the services of an advocate in court or before any tribunal, inquiry or arbitrator".
I stop there, because I want to divide paragraph (1) into the duties of a person acting as advocate in front of a tribunal or court, and the latter limb of the paragraph, which continues:
and in carrying out preliminary work directly affecting the conduct of the hearing".
It is generally recognised—although not unanimously agreed—that it is necessary, even if unfortunate, to provide advocates—whether they be barristers, solicitors or others—with an exemption from liability for negligence in the way in which they conduct their cases in court. That is necessary for the simple reason that if the exemption was not provided, there would never be an end to matters that arose in dispute, be it a criminal or a civil case. We all deal with correspondence from disgruntled, convicted criminals. I must declare an interest as a solicitor—

Mr. Douglas Hogg: That applies to most of us in the Chamber tonight.

Mr. Fraser: There could be occasions when, at the end of a criminal trial, a disgruntled, convicted defendant would begin proceedings against his advocate for negligence, and there would never be an end to the issues that were raised. Therefore, it is inevitable that exemption must be provided by a statutory instrument.

Mr. Ivan Lawrence: Are there not two other reasons? One is that the administration of justice requires that an advocate should defend his client fearlessly and independently. Secondly, as laid down in the case of Rondel v. Worsley, a barrister is obliged to accept any

client, whether or not he likes him and whether or not he agrees that his cause is just. As those rules apply to the advocate, is there not stronger justification for exemption than that expressed in the hon. Gentleman's words?

Mr. Fraser: I do not think that advocates should be too energetic in defence of their exemption from liability. I describe the exemption as necessary rather than desirable in the terms in which the hon. and learned Gentleman has put these matters. I accept the first part of paragraph 2(1) because I think it is inevitable, but I do not make the case stronger than that.
I wish to refer to another matter which has been raised with me through one of my hon. Friends by the Chartered Institute of Patent Agents. The institute asks whether patent agents and European patent attorneys have in their advocacy role the immunity from suit for negligence that has been conferred by common law on advocates in House of Lords cases and which is being conferred on advocates by this statutory instrument. Perhaps the Minister, when he intervenes, will say whether in his view the immunity extends to chartered patent agents acting as advocates in the course of their duties.
The second limb of paragraph 2(1) refers to exemption in
carrying out preliminary work directly affecting the conduct of the hearing.
I am not convinced that a lawyer or other advocate should be exempted from liability for negligence in the way in which he prepares for the hearing. I can think of circumstances in which barristers, solicitors and others who act as advocates who leave the preparation for the case to the last minute—barristers who have had ropey instructions know all about this—who leave the interviewing of witnesses to the last possible moment, who fail to issue their subpoenas in time and therefore injure the capacity of a person to present his case by a sloppy and perhaps dilatory preparation of the client's case.

Mr. Douglas Hogg: I do not agree with what tae hon. Gentleman is saying. I would not want to defend the exemption on any ground other than the one on which the hon. Gentleman seeks to defend it—that one must bring finality to legal proceedings. But, once one adopts that as the basic defence of the exemption, obviously it extends to court work; but does it not also inevitably extend to all work closely related to the ultimate case? If one could go back to the preparatory stage, one could still challenge the outcome and thus there would be no finality.

Mr. Fraser: I suppose that that is almost the only argument that could be adduced in favour of the exemption. I am expressing to the House my doubts about allowing the exemption to go more widely than is absolutely necessary. Anyone who has been concerned with litigation will know that there are circumstances, not least in criminal cases, where the prospects of the client are damaged by a failure to interview witnesses or to prepare the case in good time or with complete thoroughness. I therefore express my misgivings and concern about that part of paragraph 2(1).
I have complete misgivings about paragraph 2(2) which proposes to exempt from implied liability for negligence
the services rendered to a company by a director of the company in his capacity as such.
I do not see any justification for exempting the directors of companies from implied liability to be careful, skilful and confident. After all, on the one hand the directors of


a company are protected in so far as they are shareholders from obligations to the general public and to creditors by limited liability. They have an income very often from the company without personal risk and there are renowned cases where people prominent in public life, not least Members of Parliament, I am sorry to say have lent their names to companies by going on to the boards of directors to add some glow to the title of the directors, and sometimes receive considerable remuneration for that purpose. They have all those advantages or some of those advantages; and yet Parliament is conferring on those people an exemption from an implied obligation to give reasonable care and skill to their performance in the company as a director. That exemption is a blot upon a welcome Act of Parliament which is to the advantage of consumers.
The Minister must be particularly careful to guard the public, creditors and investors, against the performances of companies. I do not wish to exaggerate these matters, but we have recently had some well-known scandals in the insurance and reinsurance markets. There was well advertised criticism in a recent case, reported at great length on the front page in a recent issue of The Times, of the way in which Parliament supervises the commodities market.
There have also been scandals in the conduct of the securities market, and the Minister is well aware of the problems that exist there. Bearing in mind the obligation of the Department of Trade to guard creditors and the general public from the mis-management of companies it is pointing in the wrong direction to give company directors exemption from liability to show care and skill. In support of my case I quote part of paragraph 5.13 of Professor Gower's "Review of Investor Protection". The heading of that paragraph is:
Over concentration on honesty rather than competence".
Professor Gower's message is that competence, care and skill are just as important as standards of honesty. He says:
The statutory regulations concentrate, almost exclusively, on probity and, in some cases, adequacy of financial resources, and ignore questions of competence.
He goes on to say:
The result is that statutory licensing schemes which purport to exclude those who are not 'fit and proper persons' generally succeed only in excluding those who are dishonest and, moreover, who have been shown to be dishonest by being convicted of serious criminal offences, and that self-regulation all too often achieves no more than weeding out those who are obviously not 'the right sort'. The investor, it can be argued, is entitled to some protection from ignorant fools as well as from convicted crooks and unfortunates who lack wealth and the social graces.
The terms of the exemption give some kind of a charter to the ignorant fool to sit on a board of directors, to receive remuneration, and yet to owe neither the company nor the community any sort of responsibility.

Mr. Nicholas Baker: I think that the hon. Gentleman has gone a little further than he meant to, because he was talking just now about duties owed by directors to consumers or third parties. Surely the duties that we are talking about are those owed by a director to the company.

Mr. Fraser: We do not want to engage in legal niceties tonight. The hon. Gentleman is correct, but if a company becomes insolvent, the company's creditors, through the

liquidator's representations, could eventually take proceedings against the directors for their lack of competence. Therefore, there is that route between the consumer, the creditor and the director. However, I did not want to go into that degree of detail at 10.30 pm on a Thursday.
I think that I have made my point sufficiently. Instead of exempting directors from liability, the Department of Trade has some responsibility to increase their accountability and to supervise and encourage their competence. It is a pity it is phrased as it is; and I look forward to some explanation. If the Minister is not able to withdraw it on this occasion, I hope that he will keep the matter under careful review for the future.

Sir Walter Clegg: I shall be brief. First, I declare an interest as a practising solicitor and the chairman of the all-party solicitors group. I agree with some of what has been said by the hon. Member for Norwood (Mr. Fraser), but he left out one factor which affects the advocate not only in appearing in court but in preparing his case, and that is his dual duty—his duty to his client and his duty to the court. Those two duties can often be in conflict, and all who have practised as advocates have experience of that. One thing that an advocate cannot do is to put before the court a case that is known to be false. Having said that, I believe that the order is necessary, because there would be an endless stream of litigation from dissatisfied people which would not be at all satisfactory, either for them or for the profession.

Mr. Frederick Willey: I introduced the Supply of Goods and Services Bill last Session. It received the support of both Houses and is now an Act. I support whatever the Minister of State has to say. He should realise that I was not generally supported in bringing forward legislation to implement Service Please. the proposal did not receive unanimous support from the various consumer bodies until the Bill was actually introduced.
I took the course that I did because I thought that an arguable case had been put forward by the National Consumer Council. I thought that, if the Bill were presented, Parliament would accept it, although I realised that it was a revolutionary step.
Part I of the Bill arose from a Law Commission report Part II followed a report from the National Consumer Council. I had to be cautious about bringing it forward, and I thought that by providing for exclusions the legislation would be acceptable to the House. The exclusions were for the Secretary of State to decide. They had to be provided, as we were taking exceptional steps. The Service Please report was published only a month before the Bill was tabled for consideration by the House.
I believed the provision of exclusions to be a wise precaution; and, that having been accepted by all but one or two hon. Members, I thought it best to accept the Secretary of State's judgment.
I corresponded with and met some of the interested parties. I realised that I was taking a risk in presenting the Bill, because there had been no opportunity for interested bodies to make adequate representations. One had to be tolerant of the views that were put forward. Lord Mishcon


presented the Bill in another place, and he and I met the Law Society, among other bodies. We did not accept the proposal to include express exclusions in the Bill. That is why I accept the Secretary of State's discretion. When the Bill was in the other place, the Secretary of State said that he would receive representations to see whether any addition to the common law was involved. The Bill was codifying the common law.
As my hon. Friend the Member for Norwood (Mr. Fraser) conceded, there is a case for excluding advocates. The Minister may claim that they come within his definition. I doubt whether a company director can complain that the Act is an addition to the reversal afforded by the common law.
A narrower argument was put to us about non-executive directors. Although it is not conclusive, Lord Mishcon and I were satisfied that it was not an addition to the common law. We are legislating on a matter about which there will eventually be an inquiry. I introduced the Bill, although I realised that people in some professions could be at risk.
If people genuinely felt that they were at risk and convinced the Secretary of State of that, I should lean generously in that direction. The important thing was to get the legislation accepted. It was accepted without Division, but that meant that reasonable tolerance had to be inherent in it. For that reason, I recognise what the Government have now done. I hope that the House will accept that the legislation was obtained very early and that it was best to obtain it in a good spirit.

Mr. Toby Jessel: The House and the country are indebted to the right hon. Member for Sunderland, North (Mr. Willey) for the legislation that he succeeded in getting on to the statute book. The short order before us today, however, concerns one specific aspect of consumer protection.
I am a supporter of consumer protection and of practically everything that my hon. Friend the Minister for Consumer Affairs does. Nevertheless, I am rather doubtful about the proposals before us today, which seem to be not so much consumer protection as consumer non-protection with regard to the services of lawyers.
The order states:
Section 13 of the Supply of Goods and Services Act 1982 which provides that, in a contract for the supply of a service where the supplier is acting in the course of a business, there is an implied term that the supplier will carry out the service with reasonable care and skill shall not apply to the following services:—
(i) the services of an advocate in court or before any tribunal, inquiry or arbitrator and in carrying out preliminary work directly affecting the conduct of the hearing.
In other words, we are being asked to write into the law a rule to the effect that barristers or solicitors acting as advocates do not have to carry out their duties with reasonable care and skill. That is quite extraordinary.
I do not believe that barristers are bad people on the whole. I know quite a number of them, and some are among my best friends. Moreover, I come from a family of lawyers. My grandfather's uncle was Master of the Rolls 100 years ago, and in six years not one of the cases that he heard in the Court of Appeal was reversed by the House of Lords. That is very different from what happened in recent years with Lord Denning, when scarcely a month seemed to pass without that happening—not that I intend any criticism of Lord Denning.
The public are entitled to expect that lawyers should carry out their services with reasonable care and skill. I have been unfortunate enough to have needed to use the services of barristers on five occasions. On four of those occasions they did their work extremely well and conscientiously. On the fifth occasion, the work was done badly by a barrister who I am sure was an exception. Why should we write into the law any rule to the effect that consumers in that situation are not entitled to expect their barrister or solicitor acting as advocate to carry out his duties with reasonable care and skill?
I can see the argument that consumers should not be able to sue barristers. Otherwise, the process would go on for ever. Nevertheless, if the will is there, I should have thought that the accumulated brainpower of the parliamentary draftsmen, the Bar Council and the rest ought to be able to find some way of ensuring that the people in question cannot be sued without writing into law that a provision to the effect they do not have to carry out their duties with reasonable care and skill.
Barristers who are much in demand sometimes take on more cases than they can cope with, or they may have to go to some other part of the country. With just a few hours' or a day's notice, the client may be told that he will have to have a different barrister. That is not fair to the consumer. The Bar Council and the barristers are somewhat complacent about the adverse effect tag that can have on the client.

Mr. Nicholas Baker: Did my hon. Friend try the simple expedient of not paying the barrister's fees?

Mr. Jessel: I could not do that, because the solicitor would have been extremely difficult about it, and in any case it is not a satisfactory solution. A right for a barrister not to carry out his duties with "reasonable care and skill" should not be written into the law as we are being asked to write it in. I find it difficult to support that.

Mr. Ken Weetch: I am a strong supporter of the Supply of Goods and Services Act. The House owes a strong vote of thanks to all who worked so hard to put it on the Statute Book. It is a valuable piece of legislation. I was particularly pleased that its provisions in part II make an attempt to cover the supply of services, which is not a simple matter. The House will be glad to know that it is the intention of the Minister to bring part II into operation by July this year.
I am sorry to see that the Minister has used the power given to him in section 12(4) to make lawyers arguing cases in courts and before tribunals and arbitrations exempt from the provisions of the Act. It is wrong in principle and I have come prepared to argue against it. I do not do so as a lawyer—I am not a lawyer. I am the man in the street and I am a consumer of legal services on as few occasions as possible.
If the order is passed it will, among other things, make lawyers when acting as advocates exempt from section 13, which provides, according to the order
that, in a contract for the supply of a service where the supplier is acting in the course of a business, there is an implied term that the supplier will carry out the service with reasonable care and skill".
That is right. Any professional man who offers a service, or to supply a service, should do just that. It should not be a matter of contract, it is a matter of ethics.
Once again, as in similar legislation, and in restrictive practice legislation, from which one can quote examples, the lawyers are in the process of dealing themselves out of an important part of the legislation. I object to that. If the order is passed, barristers and solicitors when arguing cases before courts or tribunals of one sort or another will have no legal obligations under the Act, as other professional people have, to provide their services with "reasonable care and skill".
Far from providing an exemption, if there is one section of the community that the legislation should cover, it should be lawyers. To put it mildly, I have considerable reservations about the exemptions from section 13 proposed by the order. There is no justification for lawyer advocates in courts of law being immune from liability for negligence under the present law, and under the legislation that I thought was to be a comprehensive piece of consumer legislation, but which, if the order is passed, will not be.
Moreover, and perhaps more important, there is no good reason why immunity should be extended as proposed by the order to lawyer advocates appearing before tribunals, inquiries or arbitrations. I shall not argue about company directors. I was tempted to do so, but it will take me a little time to make the case about lawyers, so I shall leave company directors out of my argument. That is not to say that I would not be prepared to argue that case, if I had time.
First, I want to touch on the present immunity of lawyers. As a non-lawyer, may I say that I have spent a good part of this week reading the arguments contained in the legal precedents, and at the same time I have taken legal advice where I was not clear about where the arguments were leading. There is no doubt that in common law, lawyers are immune from liability for negligence in respect of mishandling court cases when they appear as advocates. For barristers, this was established by the House of Lords in 1967 in the case of Rondel v. Worsley, which has already been mentioned by a Conservative Member. That was reinforced and extended to solicitors in the case of Saif Ali v. Sydney Mitchell in 1980. The immunity from suit which lawyers enjoy with regard to their misconduct in handling court cases is a prime example, in my view, of the legal profession as a sectional interest looking after itself. The fact that lawyers as advocates in court are immune—I ask the House to note—has been decided by lawyers in the interests of lawyers, and has been corroborated, supported and underlined by other lawyers. I have yet to see where the consumers' interests have been represented here—in other words, the interests of "the man in the street".
In general terms, the law of negligence has developed tremendously in the past 50 years. I have come across some quite entertaining cases. The first great leap forward was Donoghue v. Stevenson, a case about a snail in a ginger beer bottle, which occurred in 1932. I am advised that the modem law of negligence is founded on that case. However, there are other landmarks. There was Hedley Byrne v. Heller in 1964, which extended liability for negligence to negligent statements. Another landmark was Anns v. Merton borough council in 1977, when for the first time a local authority was liable for the negligent discharge of its statutory duty under the Public Health Act. In

another sphere in which I am particularly interested, building societies and valuations, the recent case of Yianni v. Evans has extended the law of negligence thereto.
The point that I want to put to the House in general terms is that, as a result of these decisions, negligence is greatly extended as a concept. One might have hoped that the ancient immunity of advocates, derived from a time when legal liability for neglect of duty was seen very differently, would not continue to be justified. Unfortunately, one would have hoped in vain. Rondel v. Worsley and Saif Ali v. Mitchell preserved the ancient immunity for lawyers, at least in the conduct of cases in court.
I want to contest some of the points that were put briefly from the Government Benches, and I shall listen carefully to the answers to my argument. The first argument that I heard tonight was that the administration of justice requires that a barrister should be able to carry out his duty to the court fearlessly and independently. I should hope so. Nobody would want him to do otherwise. Is it seriously argued that he would carry out his duty fearfully and with bias if he were made liable for careless mistakes? I do not think that it follows in logic. It might follow in lawyers' logic, but that is logic of a pretty peculiar kind. What other professional man and what other man of business is shown to lack fearlessness and independence because he is liable for careless mistakes? It is surely an insult to the independence and integrity of the Bar, among other things, to suggest that barristers need legal immunity so that they should conduct their cases in court with fearlessness and independence. As a layman I do not accept that argument in any shape or form.
It is said that actions for negligence against barristers would make the retrying of original actions inevitable and so prolong litigation, contrary to the public interest. That is well rehearsed in the cases down the years, again by lawyers, for lawyers and underlined by other lawyers. It is often said, but I do not think that it is true. Let us suppose that a disgruntled litigant alleges that he lost his case or was convicted by a criminal court because his counsel or solicitor failed to conduct the case in court properly. The first thing that would have to be decided would be whether the advocate conducted the case properly. I accept that that would be difficult to prove. The client would have to prove by evidence from other legal practitioners that the lawyer for the defendant had not merely committed an error of judgment but had done what no reasonable advocate would have done in the circumstances. Only then would the claim against the advocate begin to get on its feet.
Then it would become necessary to inquire into what would have been the outcome of the case if the advocate had conducted it properly. I accept that that is also a considerable burden of proof. It would not be sufficient to demonstrate that proper handling of the case by the advocate might have turned the case the other way. It would probably be essential to prove that it most certainly would have turned the case the other way. Only in the most clear cases would that happen.
The case would have to be retried, it is said. I ask as a layman: What is so terrible about that in certain circumstances? It happens from time to time in the criminal law. However, in the end this is a matter of what priority one has. That is the substance of the argument. Does one have the lawyer's priority of not trying the case again? I consider that the higher priority is that of assisting


someone who has suffered from negligence when there is no avenue for him to get redress. That is the correct priority. I put it squarely before the House that surely it is better that an issue should be retried rather than that a gross injustice should occur in the form of negligence going without compensation or other redress.
A barrister is obliged to accept any client, however difficult, who has sought his services. I shall take the commonsense view. I read in Halsbury's "Laws of England":
a barrister is under an obligation to accept any brief in the courts in which he professes to practise which is offered to him at a proper professional fee commensurate with the length and difficulty of the case.
I do not see how it follows from that that a barrister should be immune from liability towards any client in whatever degree is reasonable, no matter how negligent the barrister may be in the handling of the case. Let us assume that there is the probability of a vexatious case for negligence being brought against the advocate. Who is better equipped than a barrister to resist a legal claim for negligence if there is no negligence? A barrister needs no legal immunity from liability. He is able to cope adequately with frivolous claims for negligence. If there is merit in the claim, the barrister will have to compensate the client, quite rightly. If there is no merit in the claim the barrister will be able to defend the position without too much trouble. There seems to be no inherent merit in the principle of immunity enshrined in Rondel v. Worsley. It is something for Parliament to ponder in the context of the proposed exempting order. That case is a lawyers' charter. I am speaking for the ordinary man.
The second broad part of this argument refers to the extension of immunity to advocates before any tribunal, inquiry or arbitrator. In other words, there are already privileges from immunity under the common law and in this legislation we intend to add insult to injury tacking on a bit. That is what is proposed.
Again referring to the case law, so far as I can read there is nothing, not even the slightest hint, in Rondel v Worsley or Saif Ali v. Mitchell to indicate that the immunity enjoyed by advocates before the court already extends under common law to advocates before tribunals, inquiries and arbitrations. Having read all the cases, I see no suggestion by any of the learned judges that there should be any extension to tribunals. The indications are, if anything, the other way. Lord Wilberforce in Saif Ali, page 1039, described the extent of the immunity as he understood it. Having described it, he then extended it to cover solicitors acting as advocates. His Lordship never suggested that the principle might apply to proceedings other than litigation in court. But that is precisely what this legislation will do. This is supposed to be legislation for the ordinary common man. It looks to me to be nothing of the kind.
A little earlier in the same case, the noble Lord quoted with approval a New Zealand case which I also endeavoured to read, Rees v Sinclair, where the judge had said of the principle of barrister immunity in relation to court work:
The protection should not be given any wider application than is absolutely necessary in the interests of the administration of justice".
Lord Diplock in the same case referred to this passage with approval. If this is right and if the whole trend of the

argument in all those cases is right, there is no reason to think that the principle of immunity extends to matters that are conducted before arbitrations, inquiries and tribunals.
It will be said that the present law is uncertain as to the liability for negligence of advocates before tribunals, inquiries and arbitrations. T stand to be corrected, but I do not think there is any case which has decided this matter one way or the other. So nobody can say for certain whether immunity applies before these bodies or not. In view of that, so runs the argument, it would be right to prevent the 1982 Act from implying that the advocate will carry out the service with reasonable care and skill. By providing exemption now, it is said, the common law position, whatever it is, will be maintained. I would argue that to some extent, this is so. I accept it to a certain point.
However, unless advocacy before tribunals is exempted by this order, the 1982 Act will bite—I hope that it will have bitten very hard—and so impose a duty of care, although it may be the law that there is no such duty at present. It has to be accepted that the object of the 1982 Act and of this order, which follows it, was to declare in a statutory form the existing common law. It is argued that it is a codification statute, pure and simple. The reality is that it is an extension.
I have been saddened and disillusioned to find so much consumer legislation from which lawyers have been exempted. It was the case with the restrictive practices law and the Fair Trading Act 1973, where, after a long rigmarole about how evil restrictive practices were no one was surprised to find legal services at the top of the list of exempted professions.

Mr. Willey: Has my hon. Friend received or sought any representations from the National Consumer Council?

Mr. Weetch: I have not sought any.

Mr. Willey: My hon. Friend would have been wise to have done so.

Mr. Weetch: I have relied on my own judgment in these matters, as I usually do.

Mr. Willey: It is not my hon. Friend's judgment.

Mr. Weetch: It is my own judgment, expressed to the best of my ability. The legislation that one would have hoped to see in the supply of Goods and Services Act would benefit the ordinary consumer. A section of it has been hijacked by lawyers who have avoided its provisions. Once again, as in other legislation, they have been aided and abetted by politicians.
Lawyers in Britain have restrictive practices that are almost as wide as the Atlantic. If there is one section of the community that needs no immunity and which has proved that it can take care of itself, it is advocates. They need no help from us. They need none and will get none from me. I hope that they get none from the Minister. I urge the hon. Gentleman to withdraw the order.

Mr. Nicholas Baker: Those of us hon. Members who dare to admit that we are lawyers by profession, as we scurry to our homes tonight, will go in groups, fearful that we shall encounter the hon. Member for Ipswich (Mr. Weetch). I pay tribute to the right hon. Member for Sunderland, North (Mr. Willey) for the Act. I had grave doubts about the advisability of including


services in the order. In many respects, this well-intentioned Act, directed much more towards protecting consumers in the sphere of goods, will have little or no effect on consumer protection in services. A director is not in the position of someone who is providing a service. It is generally right that a director should be exempt, as the order provides.
The Select Committee on Statutory Instruments, of which I am a member, has asked about the definition of advocate. It would be useful to have clarification. A barrister and, presumably, a solicitor, when acting in a court or before a tribunal is clearly intended to be covered. What about people who serve in citizens advice bureaux, hon. Members and people acting for others?
There is some doubt about what the phrase
directly affecting the conduct of the hearing
means. Does it cover a lawyer—if I dare utter the phrase—preparing papers on a matter that ultimately comes to court? That should be clarified.
My third and last point concerns consultation. My hon. Friend will know that I am interested in the work of his company advisory law panel. It would be helpful if its proceedings were not confidential. Can the House be told with whom he consulted on the exemptions provided in this order? Did he consult the panel? Did he consult other bodies, such as the Institute of Directors, about the exclusion of directors? I would be interested to hear his answers about that.
With that, I support the order.

Mr. Tom McNally: I congratulate the hon. Member for Ipswich (Mr. Weetch). If ever I have a dock brief to hand out, I will certainly give it to him. There was a certain poetry as he bombarded the Conservative Benches with case law and judgments and when the serried ranks of lawyers fled the field in the face of his onslaught.
I declare an interest, in that I am a consumer. Looking around the Chamber earlier, I felt like a Daniel in a den of lions all ready to state their cases. The order is a worry. I hope that the Minister thought hard before bringing it before the House. The hon. Member for Norwood (Mr. Fraser) was right to say that it is an important issue. It should be brought before the House and discussed not only by lawyers with a vested interest but for the wider consumer interests that the Bill intended.
The Act deals with consumer protection. It is worrying that the Minister's actions under the clause should be exercised in defence of lawyers and directors. I do not wish to make cheap party political points or a cross-the-Floor point, but when the man in the street is asked "Where do you think protection or exemption will come?" and is told that the Minister exempted directors and lawyers, the phrase "Well, he would, wouldn't he?" comes echoing down the ages. I hope that the Minister does not believe that this order will go through on the nod. We are asking him for a full explanation as to why he should have exercised his right on directors. Some of the lawyers have agonised to us about the tremendous burdens they carry. We shall listen to the Minister's judgment on that. Nobody has yet put forward the case for directors.
As to the lawyers, the hon. Member for Ipswich made a valid point when he said that moods and attitudes are

changing, and that some of the historic rights and privileges of the legal profession are being questioned. It should not be automatically assumed that the House will understand the heavy burdens that lawyers carry. There is less sympathy towards the bare-footed boys from Gray's Inn than there may have been in previous Parliaments. They must face the fact that to take exemption from negligence is a very serious matter, just as it is serious for a victim of supposed victim of negligence. It is awesome to try to take on a lawyer with all his expertise. Some Conservative Members have tended to over-egg the pudding by talking about continuous litigation. It is not as simple, straightforward, or obvious as that.
I do not know whether other hon. Members have received correspondence from the Consumers Association, but I received a letter from that body, one line of which I shall quote. It is the key to what the Minister must reassure the House about. The letter states:
Surely it is better that an issue should be retried rather than a gross injustice should occur in the form of negligence going without compensation or other redress.
The hon. Member for Ipswich mentioned that point.
The crux of the matter is that lawyers are to have that extra escape route from negligence. The Minister shakes his head, which means, I hope, that he will reassure us on the matter. There is no reason why directors should have that exemption. The Minister's predecessor explained her attitude to the House—this may be the key to why this order is before us tonight—by saying:
Exempting power is a small price to pay for quick legislation.
That is the key to the dilemma faced by the Minister in bringing in this legislation. Was he faced with the alternative of getting this legislation or with having wrecking tactics imposed by vested interests?
The previous Minister also said:
My right hon. Friend will use the power very sparingly."—[Official Report, 22 January 1982; Vol. 16, c. 537.]
Can the Minister say tonight that this order shows the sparing use of those powers? Is he not conceding that, in consumer protection, we shall have gentlemen and players, where the players—such as plumbers, builders and car mechanics—will be held responsible but the professionals will be exempt? That is the case that he must answer.
Beyond the Minister's reply, I ask the Law Society—with the hon. Member for Ipswich I have done a little research—to ponder whether, when legislation is before the House, making offers that cannot be refused is more in keeping with the Mafia than with society protecting the integrity of a profession. It is not good enough that one justification for exemptions is that the Law Society would have caused trouble. That is no basis on which to make law, and it is one reason why we want more reassurance than the simple explanation of the Minister tonight.

Mr. Ivan Lawrence: Fortunately, the hon. Member for Ipswich (Mr. Weetch) is more or less on his own tonght in his vindictive and obsessive hatred of lawyers. I hope that the time never comes when he needs one.

Mr. Weetch: So do I.

Mr. Lawrence: The hon. Gentleman's attempt to turn this debate into bash lawyer's night at the Palais de


Westminster has not been overly successful. He has shown a singular lack of understanding about the problems that face everyone, layman and lawyer alike, in our judicial system. The system is geared to protect, above all, the client and the individual. It is wrong to suggest that there is no remedy against the negligent lawyer. If a case has been conducted negligently, as a result of which injustice is done, the Court of Appeal puts it right at no expense to the layman who has suffered. Furthermore, no lawyer is allowed to practise, if he is persistently negligent, without the sinecure—sometimes the worst penalty that can befall a lawyer—of the suspension of his practice by those who watch over him to ensure that his standards are of the highest and that his integrity and performance are a credit to the profession.
Therefore, there are remedies, even if the hon. Member for Ipswich does not know that. The hon. Gentleman was ridiculous in his dismissal of the justifications for the exemptions for lawyers that are set out in the case of Rondel v. Worsley. I hope that he never has to wonder whether his lawyer is pulling his weight for him in a court of law because he is frightened of what others will say, or that an action for negligence might be brought against him. To pretend that such pressure would not weigh heavily on the shoulders of a lawyer—who is, after all, a human being, and just as subject to such pressures as anybody else—is to display a singular lack of understanding of human nature.
The rights that lawyers enjoy are—as has been pointed out—exceptional, but they are constantly being recon-sidered by lawyers. They are particularly careful not to extend them beyond the existing bounds. Reference has been made to the case of Rondel v. Worsley. In that case, their Lordships, by a majority, decided:
Public policy does not require that a barrister shall be immune from action for negligence in relation to matters unconnected with cases in court, for if he fails to exercise the ordinary care and skill that can reasonably be expected of him, he should be and is in no better position than any other professional man.
That is scarce protection for the lawyer.

Mr. McNally: rose—

Mr. Lawrence: I am sorry, but I have no time to give way. I continue by reaffirming the proposition that the only protections which the lawyers have are those where it is considered that public policy and the administration of justice require that this be done. I have only a few minutes in which to make the many points that I should like to raise. However, it is clear that the order is part of a codification process and that there is no intention to have—and the words to not achieve—an extension of the existing law. It is crystallised and codified and made clear in statutory form, so that all can see. No additional benefits are given to lawyers, or anyone else.
Therefore, it behoves all hon. Members to accept and welcome the order, which is based on the Act introduced by the right hon. Member for Sunderland, North (Mr. Willey), and to congratulate the Minister on introducing it. We must hope that it has—as the hon. Member for Norwood (Mr. Fraser) implied—the unanimous support of the House.

The Minister for Consumer Affairs (Dr. Gerard Vaughan): In the few minutes left, I shall take up as many points as possible.
I appreciated the point made by the hon. Member for Norwood (Mr. Fraser). It was right and proper of him to make it, and I know that the Department will have been pleased to hear his remarks about the clarity of the order's language. That is pleasing, because the Department is making a great effort to simplify the language used in our documents. Only the other day I was extremely pleased to find that the paper that we produced on the nationalised industries' consumer councils had led to several people writing to say that the English was very clear. That was most welcome.
It seems clear that there is a serious misunderstanding about the order on the part of several hon. Members. The debate has ranged over different aspects, which could be debated for a long time, because many of them concerned whether the law should be changed. I hate to disappoint the House, but those issues are not before us tonight. The object of the order is simply to ensure that part II of the Supply of Goods and Services Act does no more than it was intended to do. It does no more than codify and crystallise the law and bring it together in one place. It is not intended to alter the law.
The order is made under part II of the Act introduced by the right hon. Member for Sunderland, North (Mr. Willey). We all pay tribute to him for it. We all especially welcome the fact that he is in the Chamber to join in the debate. He reminded us that part II followed a report entitled "Service Please" published by the National Consumer Council in October 1981. It set out clearly the problems that consumers face when they get unsatisfactory service. It was because of the problems set out in the report that we put to the Law Commission a request that it should study the law on services. We await its recommendations about what changes, if any, should be made in the present law. Part II of the Act codifies, but does not amend or change, existing common law.
My hon. Friend the Member for Twickenham (Mr. Jessel) said that this was a consumer non-protection order. The hon. Member for Stockport, South (Mr. McNally) said something on the same lines but with slightly different emphasis. I assure the House that I would not wish to lay an order that in any way damaged the interests of consumers. I am constantly alert to avoiding unnecessary regulations in that area as I believe strongly in open competition and freedom of choice for consumers, provided that the trade is carried out honestly and that the goods are of the required quality and safety. Those are the principles that I am following.
Interested as I was to hear about my hon. Friend's illustrious family tree and his illuminating comments on his legal experience, I assure him that there is nothing in the order to reduce the protection for consumers. It is a codifying measure.
Part II of the Act will come into force on 4 July. It provides that, unless there is some special agreement to the contrary, the supplier will have to carry out the service with reasonable care and skill, within a reasonable time and at a reasonable price. Those three basic requirements underlie the whole purpose of the Act and are, of course, part of the common law.
The advantage of part II is that it brings into one place, for those who have to apply the law or enforce it, the position on the law. They will not have to refer to large numbers of different legal textbooks or volumes of law


reports to discover what the law is. It will help those who wish to find out exactly what the law is. It is important that we do not confuse that with wanting to change the law.
When the Act passed through the House, I gave an undertaking, as did the right hon. Member for Sunderland, North, that if in any way it inadvertently amended the law or made new law, we would lay an order to ensure that that did not happen. We have such an order before us tonight. It is a short order which seeks to ensure that the existing common law continues to apply in two areas only where it is recognised that the 1982 Act might inadvertently change that law. It is important to say again that the effect of the order is simply to ensure that the existing law continues unamended. We have not had extensive representations on this matter. Both these aspects have been brought to our notice by the Law Society. It was right and proper that it should examine whether there had been any changes made.
The first of these areas concerns solicitors and other advocates when and only when they are acting before a court, tribunal, inquiry or an arbitrator, or are carrying out preliminary work related to appearing. It is important that I should make it clear that other services provided by a solicitor—for example, conveyancing—will continue to be subject to the normal duty of care and skill which is imposed by the present common law.

Mr. Jessel: My hon. Friend says that the order does not change the law, but does it not put an official stamp of approval on the concept that a barrister does not have to apply reasonable care and skill?

Dr. Vaughan: I do not accept my hon. Friend's view. Under the Act we have the obligation to leave the law as it is. The order is not intended to change the law. Merely keeping the law as it is does not mean that one is saying that the law should not be altered or that the ordinary duties of care and skill imposed by the common law should not be continued.
Two hon. Members spoke about other types of advocacy. Although trade union officials were not mentioned, patent agents were referred to by the hon. Member for Norwood. With regard to those types of

actions in court, the order leaves the position unchanged. I am advised that no cases have yet arisen to establish the position under common law of people undertaking such activities. The uncertainty, if there is an uncertainty, remains unchanged by the Act and by the order. The question of immunity could still be argued if a case ever arose that needed to come before the court.
My hon. Friend the Member for Dorset, North (Mr. Baker) asked what an advocate was. The order does not apply to Scotland, so it does not raise the special position of Scottish advocates. In the order, "advocate" is used in the general sense of someone pleading or speaking for another. It is used in the ordinary sense of the word within the English language.
My hon. Friend the Member for Dorset, North and the hon. Member for Ipswich (Mr. Weetch) asked about the conduct of hearings. The hon. Member for Ipswich did not read the whole of the judgment in Rees v Sinclair, the New Zealand case, but it made clear that the protection should exist for work done for the appearance in the court but only for that work. The judgment used the words
only where the particular work is so intimately connected with the conduct of the cause in Court that it can fairly be said to be a preliminary decision affecting the way that cause is to be conducted when it comes to a hearing.
That is the part of the judgment which, I submit, is relevant to this matter.
Paragraph 2(2) deals with a particular aspect of the activities of company directors. It is not an aspect which directly concerns consumers. It relates only to the conditions between the company and the director which govern the service that he gives to that company. Unless the director has a special contract giving him specific terms, the common law requires him to exercise a degree of care and skill judged in the light of his own qualifications. For example, if a director happened to be an accountant he would be expected to exercise the care and skill of an accountant, but, if he was not an accountant, that would not be expected of him. Again, I make the main point—the order leaves the law exactly as it is.
This is an important and simple order. The law remains the same, and I hope that the House will accept the order on that basis.

Question put and negatived.

Overseas Students

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Mather.]

Sir Paul Bryan: I and my hon. Friends are raising the subject of overseas student fees because we understand that the Government are at long last coming up to making important policy decisions. We wish to underline the fact that the House feels just as strongly today that radical changes of policy are required as it did last June when 140 right hon. and hon. Members put their names to the early-day motion pressing the Government to adopt the recommendations in the report of the Overseas Students Trust to which my hon. Friend the Member for Cambridge (Mr. Rhodes James) made such an excellent contribution.
Everything that we have seen and heard since last June increases our misgivings. The number of foreign students continues to fall as they are deterred by our high fees and attracted to the universities and institutions of other countries, our main competitors, which are only too keen to educate them in their culture and methods.
To give one example, in 1979, 45 per cent. of students leaving Hong Kong to study abroad came to the United Kingdom. In 1982, the percentage fell to 24 per cent. Those figures tell the story of thousands of Hong Kong students, who have always been students of the highest quality who would have wished to come and study here, diverted to America, Canada and Australia.
As we travel the world we are all increasingly impressed and depressed by the effect of our overseas student policies on our relations with our old friends such as Malaysia and Hong Kong, which for generations have relied on our education system to our mutual benefit. The continuing and growing concern in industry is shown by a letter to the editor in The Daily Telegraph on 25 January, signed by the chairmen of Shell, Unilever, BICC, British American Tobacco Industries, BP and Blue Circle Industries. One does not often get any letter to the press on any subject signed by six such distinguished men. They really are the leaders of British industry. Once again they stress the worries that industry has so often expressed before. They say:
The Governments of our competitor countries, the United States, Germany, France, Japan, recognise the value for their overseas trade of training nationals from countries where their long term interest will lie. This country should do the same and we hope the Government will see its way to adopting policies with this aim in view.
Fortunately, it is not only Back Benchers, industrialists and educationists who share that concern. The last Foreign Secretary, Lord Carrington, and indeed the present Foreign Secretary—in fact, almost any Minister one speaks to—are refreshingly and encouragingly in agreement on the fact that something should be done.
Nevertheless, I have my fears. They could not be better put than they were by the Lord Beloff in The Times last Monday. I wish that there was time for me to read the article in toto, but I shall content myself by reading some extracts. He said:
No one doubts that the need is there. Indeed, ever since the first decisions were taken to limit the number of non-British students in this country by differential fees, the potential damage to British interests has been repeatedly pointed out and from many quarters … The obstacle does not lie in any dispute over

the desirability of making available the necessary funds; it lies solely in the inability of the departments involved to find a way of paying the bill.
He goes on:
One has a classic case of an agreed policy that seemingly cannot be carried out because it does not fall within the remit of a single Department as that remit is defined by the Treasury … So long as the two guiding principles are the division of responsibilities between Departments and the subordination of policy to the Treasury's practices in respect of estimates, no civil servants will be able to break through the rigidities of the system.
The policy for overseas students is uniquely vulnerable to becoming stuck in this bureaucratic bog. It comes under three Departments. Everyone agrees that it is important as a whole, but it is not all important to any one Minister.
The Hong Kong Government have offered to pay half the cost involved in restoring Hong Kong students to British student status. It could be that, for the reasons given by Lord Beloff, that offer, which should simplify and open the way to progress, is an obstacle, as it does not fit the established system. I should like an assurance from the Under-Secretary that the acceptance of the offer is not beyond the capacity of the Government machine.
Finally, I emphasise the need for speed. Prospective students are making their plans now for the 1983–84 academic year. Any delay in introducing new measures could make those plans useless.

Mr. Christopher Price: I support the hon. Member for Howden (Sir P. Bryan) in everything that he has said. I am grateful to him for giving other hon. Members an opportunity to support his views. The Select Committee of which I am chairman has expressed great anxiety about this problem and is continuing to follow it up.
I want to make three points. First, those hon. Members who accompanied me on an all-party delegation to Malaysia last summer could not have been more affected by the virulence of our reception by the Malaysians, because this decision changed the whole relationship between Malaysia and Great Britain which had existed for many years. Malaysia is only one example.
Secondly, this decision has succeeded in convincing reasonable people in places as far apart as Mauritius and Cyprus that the Soviet Government are more benign than the British Government towards the needs of young people in the world. Any decision that creates that sort of impression abroad must be wrong.
I believe that the Government now recognise that they made a mistake in the precipitate nature of their original decision.
With its moderate, balanced and inexpensive proposals the Overseas Students Trust has given the Government an opportunity to put the matter right. In view of the money that the Chancellor now seems to have available for tax cuts, I hope that the Government seize that chance.
The House of Lords judgment before Christmas makes clarification by the Government of their attitude to overseas students all the more urgent.
I hope that the points made in the Overseas Student Trust report, particularly as regards Cyprus, will be taken seriously by the Government, because they have important foreign policy implications.

Mr. Robert Rhodes James: I strongly support what has been said by my hon. Friend the Member for Howden (Sir P. Bryan) and by the hon. Member for Lewisham, West (Mr. Price).
I declare an interest, in that I was involved in the report of the Overseas Students Trust, especially chapter 7. We attempted to achieve a balance between the interests of overseas students, the British taxpayer, the British institutions of higher learning and the British political and commercial interests involved, and also the Commonwealth, with which we were especially concerned.
The difficulty is that the advantages are very hard to quantify, although some of us realise that they are extremely important. The situation that the Government inherited in 1979 was indefensible, but they have now moved to an extreme position on the other side which I regard as equally indefensible. The time has therefore come for a sane compromise between the extremes of 1979 and those that followed.
I believe that the report of the Overseas Students Trust provides that compromise between the two extremes; and I strongly urge the Minister, in the interests of our country and our institutions of higher learning, and in the traditions of what this country has been and can be, to accept that the position should be reconsidered and altered so that we may return to the position that we once enjoyed.

Mr. Harry Greenway: I am grateful to my hon. Friend the Member for Howden (Sir P. Bryan) for initiating this debate and for giving me a small place in it. I agree with all that has been said. I echo especially the remarks of the hon. Member for Lewisham, West (Mr. Price), Chairman of the Select Committee on Education, Science and the Arts, and the unanimity of that Committee on this issue.
I had the honour and pleasure to go to Mauritius with a parliamentary delegation just over a year ago. I was struck, as other hon. Members have been struck in other countries, by the reaction of the people there to what has happened. Incidentally, it is a very sensitive area in terms of defence and one in which we wish to continue to have an interest. Yet we seem to be doing our best to get out of it all altogether.
The people of Mauritius, which has a population of about 1 million, are at present almost entirely Anglophile. They have been to schools and universities in this country. They even do the British football pools and listen to the results. That is surely the ultimate proof of their total integration with our way of life. When they discovered that I was an Aston Villa supporter I met many other people who supported that team without ever having been to this country. That is surely a wonderful thing.
The ultimate tragedy to me was to hear from the Deputy Speaker of the House of Commons in Mauritius, which has a marvellous, democratic tradition, that although he had sent the first two of his four children to university in this country the third would be going to France, because he could not find the £7,000 to send him here. The children of others whom I met were going to Russia. They were being sent practically anywhere but here. When one considers the influence gained by France and the Soviet Union and the trade advantages that they derive, it is

ridiculous for us to lose the advantages that we certainly gained as a result of our earlier policy with regard to overseas students.
I have spent a great deal of my life in institutions of education and I am convinced that the more diverse the population of pupils or students, the richer the interchange between them. It would be very sad to lose that in any event.

The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Malcolm Rifkind): I thank my hon. Friend the Member for Howden (Sir P. Bryan) for raising this subject and for giving me an opportunity to report to the House on the developments that have taken place on this subject since my right hon. Friend the Foreign Secretary announced to the House on 9 June last year the Government's preliminary response to the report of the Overseas Students Trust.
One acknowledges the concern felt on both sides of the House of this subject. The fact that a large number of hon. Members are in the Chamber for an Adjournment debate illustrates clearly and eloquently the importance that is attached to this topic.
When my right hon. Friend responded to the House on 9 June last year, he said that the Government welcomed the report of the trust and he would seek to give an instructive and helpful response to it. He announced also that the inter-departmental group of officials set up in 1980 to monitor the effect of the previous decision on overseas students' fees would be asked to scrutinise the recommendations of the trust and to put its conclusions to Ministers. That is a complicated matter, and hon. Members will have seen the size of the report—there are 300 pages of important and valuable information. It has been a difficult task for the group of officials.
The group represents the various interests that are involved in the subject. Not only is the Foreign and Commonwealth Office, including the Overseas Development Administration, involved in the matter, as is the Department of Education and Science—the presence of my hon. Friend the Under-Secretary for that Department shows the interest that it attaches to the subject—but the Treasury, the Department of Industry and Trade, the Home Office, the Scottish Office, the Welsh Office, the Northern Ireland Office and the British Council are all represented on the group. Over the past few months the group has been giving detailed examination to the recommendations in a helpful way.
The group has also had the benefit of the advice of other outside organisations and interest groups that have studied the report and made their views known. Organisations such as the United Kingdom Council for Overseas Students, the Council for Education in the Commonwealth and the National Union of Students have all made their views known, and this has been of particular benefit.

Mr. Bowen Wells: Does my hon. Friend agree that with the benefit of all the advice and help that the Minister has been given, the six months' delay has been unacceptable?

Mr. Rifkind: My hon. Friend has studied this document and should appreciate that the extremely large number of detailed recommendations, and the many bodies that wish to give their views on the subject would


make it very difficult to make a response in less than that time. I assure my hon. Friend that the Government have not the slightest desire to delay conclusions on the matter.
The inter-departmental group has now submitted its conclusions to Ministers, and these are being considered. The Government approach this matter fully accepting, as my hon. Friend the Member for Howden said, that it is desirable to seek to encourage overseas students to come to the United Kingdom for their education, and that this is desirable not only for obvious educational reasons, but in terms of our longer-term commercial and industrial objectives, and our foreign policy objectives.
Equally, we have said all along, and my hon. Friends will accept this, that at a time when our home students are having to take into account reductions in public expenditure in education, there have to be implications in the Government's economic strategy for overseas students.
Many of the recommendations in the document are also concerned with longer-term proposals, and proposals that involve consultation with outside bodies. For example, there is the proposal that education establishments should be more flexible in their fee structure, which has to be studied both with the universities and with local education authorities.
My hon. Friend the Member for Howden mentioned the proposals for sharing the burden of supporting overseas students, and the proposals for co-operation with other Governments and with the private sector. These require consultation with the bodies concerned about a way of operating that will be of benefit.
There are a number of different aspects of the Government's overall attitude on which I want to comment. My hon. Friend the Member for Howden, who took an interest over the years in the problems of Hong Kong, drew the House's attention to the offer, which was welcomed by Her Majesty's Government, of the Government of Hong Kong to contribute towards the cost of certain Hong Kong students who will be studying in the United Kingdom. The document that I mentioned says that it is desirable that not only students of United Kingdom dependent territories be entitled to fees on a home student basis, but that, where appropriate, the Government of those territories should make a contribution. That is being taken into account.
Of course, it is not just a question of Hong Kong. The Government are particularly keen to encourage students from other Commonwealth countries. The proposals in the report of the Overseas Students Trust have also taken that fact into account. There are recommendations for extending the Commonwealth scholarship and fellowship pland and improving the Commonwealth post-secondary education, and they have been studied in detail by the inter-departmental group of officials. We recently received the first report of the Commonwealth standing committee on Commonwealth student mobility. That standing committee was recently established by the Commonwealth Secretary General, Sir Shridath Ramphal, under the distinguished chairmanship of Sir Roy Marshall. That, too, is of particular benefit at present.
The hon. Member for Lewisham, West (Mr. Price) mentioned Malaysia and Cyprus, as did my hon. Friends the Members for Ealing, North (Mr. Greenway) and Cambridge (Mr. Rhodes James). I pay tribute to my hon.
Friend the Member for Cambridge for the part he played in the establishment of the Overseas Students Trust report and survey, which are the basis of this discussion.
Members on both sides on a number of occasions have made clear their concern tha the problems of Cyprus should be known and understood by the Government. Recently, my hon. Friend the Member for Leominster (Mr. Temple-Morris) led an Inter-Parliamentary Union delegation, which met my right hon. Friend the Minister of State, Lord Belstead, who has special responsibility for this matter in the Foreign and Commonwealth Office, to emphasise their concern on the topic.
Malaysia is not the subject of specific recommendations in the Overseas Students Trust report, but we have been aware of the comments made not only by the hon. Member for Lewisham, West, but by other hon. Members in recent months.
The commercial and economic implications of policy on overseas students has been referred to on a number of occasions, and my hon. Friend the Member for Howden mentioned the interesting letter that appeared in the press, signed by Sir Peter Baxendell and a number of other industrialists. I take this opportunity to pay tribute to the contribution made by the private sector in the training of students and provision of facilities in the United Kingdom. Some £12 million has been made available over the past year for that purpose. The private sector has made a valuable contribution in this respect.
My hon. Friend referred to the recent article by Lord Beloff, which I read with great interest. I assure my hon. Friend that although a large number of outside bodies and Departments are interested in this subject and have made contributions to it, the decisions at the end of the day will be made by the Ministers. As a number of Departments are involved, it is clear that a collective decision is required. I hope that that information will reassure my hon. Friend.

Sir Paul Bryan: Will my hon. Friend say when we can expect at least a statement from the Government? As I said in my speech, a lot of prospective students are now making plans, so that a delay of a month at this stage is very serious.

Mr. Rifkind: I fully acknowledge what my hon. Friend says. He makes a valid and legitimate point, and I hope that I can reassure him in that respect.

Mr. A. J. Beith: Announce it.

Mr. Rifkind: The hon. Member for Berwick-upon-Tweed (Mr. Beith) will be aware that it is not normally the business of a person in my position to give the date of a Government announcement. That is the responsibility of certain other hon. Members.
The Government's consideration of the report and the recommendations of the inter-Departmental group of officials is virtually complete. A statement will be made in the near future. Decisions on the matter are imminent. The Government fully accept the point made by my hon. Friend the Member for Howden that not only would it be undesirable from the point of view of potential students to be left in any doubt for a considerable time about the Government's policy but in any event the detailed studies to which I have referred have now been virtually completed. Therefore, there will be no problem about the Government making their views known—

Mr. Greenway: May we expect something to happen in the next three weeks, or four, at the outside, without asking my hon. Friend to make an announcement or give too much away?

Mr. Rifkind: My hon. Friend can reasonably make such an assumption. I hope that the House will forgive me if I do not go into greater detail, for reasons that I am sure hon. Members on both sides of the House will fully appreciate.
I am grateful to those hon. Members who have spoken in the debate. The importance and seriousness of the topic is well understood by the Government, otherwise we

would not have been involved in such detailed analysis and study to ensure that proper, sensible and effective proposals are brought forward for the consideration of the House and the country. I am sure that the debate has been important in highlighting and publicising the continuing concern of the House for this policy. I hope that the announcements that will be made by the Government in the near future will be a reassurance to both my hon. Friend and the House as a whole.

Question put and agreed to.

Adjourned accordingly at three minutes to Twelve o' clock.